The premise of this chapter is that we can manipulate GDELT data to determine, to a greater or lesser extent, the price of oil based on historic events. The accuracy of our predictor will depend on many variables including the detail of our events, the number used and our hypotheses surrounding the nature of the relationship between oil and these events.
The oil industry is very complex and is driven by many factors. It has been found however, that most major oil price fluctuations are largely explained by shifts in the demand of crude oil. The price also increases during times of greater demand for stock, and historically has been high in times of geopolitical tension in the Middle East. In particular, political events have a strong influence on the oil price and it is this aspect that we will concentrate on.
Crude oil is produced by many countries around the world; there are however, three main benchmarks that are used by producers for pricing:
Brent: Produced by various entities...