Proceedings of the Second International Conference on Inventive Research in Computing Applications (ICIRCA-2020)
IEEE Xplore Part Number: CFP20N67-ART; ISBN: 978-1-7281-5374-2
Crude Oil Price Prediction Using Deep Learning
Y. Jeevan Nagendra Kumar1
1Professor and Dean, Department of Information Technology,
Gokaraju Rangaraju Institute of Engineering and Technology, JNTUH,
Hyderabad, India
jeevannagendra@griet.ac.in , 9010180199
Abstract:
The crude oil price has a huge impact on the world's economy.
From the past few years, crude oil price fluctuates more than any
other commodities prices. As the crude oil price depends on
several external factors and there is high volatility predicting
crude oil prices is very challenging. Long Short-Term Memory
(LSTM) based on a recurrent neural network has shown better
results in predicting prices that have high volatility. By utilizing
this model, the significant crude oil price is evaluated and
modelled. The exhibition of the proposed model is assessed by
utilizing the valuable information in the WTI unrefined
petroleum markets. The exploratory results show that the
proposed model achieves increments in the expected precision of
results. The data required is collected from the official website of
FEDERAL-RESERVE -BANK -OF -ST. LOUIS
Keywords: Long Short-Term Memory, Crude Oil Price
Prediction, Recurrent Neural Networks, Vanilla LSTM,
Sequential LSTM, Epochs, Step size.
I. INTRODUCTION
Nowadays, Long Short Term Memory (LSTM) and
Recurrent Neural Networks (RNN) are using for sequence-
based problems such as Question-answering, Speech
recognition, Text classification, Rhythm learning,
Grammar learning, Handwriting recognition, Human action
recognition, Behavior recognition of robots, Predicting
subcellular localization of proteins, Time series anomaly
detection, several prediction tasks in the area of business
process management, Power demand forecasting, Semantic
parsing, Object Co-segmentation, Airport passenger
management, and Short-term traffic forecast. Here LSTM
is used for forecasting the price of Crude oil.
Impact of crude oil price on the world's economy:
There is almost 6000+ by products extracted from crude
oil. Once the crude oil price increases, it shows a rise in the
price of diesel fuels, gasoline, and kerosene. It impacts
industries such as the automobile industry, textile industry,
logistics, travel, and tourism. It shows the spike in
electricity charges due to the increase in crude oil prices.
Sudden falls and a rise in crude oil prices can send the
global market into a complex situation.
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Partapu Preetham2, P. Kiran Varma3,
P. Rohith4, P. Dilip Kumar5
2 3 4 5Department of Information Technology,
Gokaraju Rangaraju Institute of Engineering and Technology,
Hyderabad, India.
Factors affecting Crude oil price:
Crude oil price keeps on changing due to the changes in
policies, news, demand, and fluctuations in the world
market. Here are the top 3 factors affecting crude oil
prices.
1) Supply:
The Organization of the Petroleum Exporting Countries
(OPEC) can have a significant influence on oil prices. It is
a group of 14 world major crude oil-exporting nations. It
regulates the price and petroleum policies among these 14
nations to maintain a healthy and fair relation among these
nations.
2) Demand:
Demand for crude oil is affected based on several reasons
such as transportation, population growth, and seasons.
For example, COVID-19 has affected the travel and
transport industries worldwide. Thus, resulting decline in
demand for crude oil.
3) Shale oil:
The US Government started producing shale oil using the
latest oil extraction technologies. Shale oil extraction cost
is low compared to crude oil extraction costs. Increase in
shale oil extraction results in decreasing crude oil demand.
II. LITERATURE SURVEY
Data collected from the official website of FEDERAL-
RESERVE-BANK-OF-ST. LOUIS. It has Data of Crude
oil price from 2015. The price of crude oil is in Dollars. By
collecting data from FEDERAL-RESERVE-BANK-OF-
ST. LOUIS. There is no need to perform a lot of Data Pre-
processing [1].
Predicting Stock Prices using LSTM is the reference about
predicting the stock price. The key points that are observed
here are, how the Pre-processing has done and which
normalization technique they have used to transfer the data
[2]. The key points observed here are the Methodology
they used, how they got the results using it, and what is the
epochs and timestamps they used [3].
Also, observed the layers in LSTM that they have used,
which activation function is used and what is the loss
function that they used [4]. It has been observed that they
have modified the neural network in such a way that what
are all the changes they have done and how they have
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 Proceedings of the Second International Conference on Inventive Research in Computing Applications (ICIRCA-2020)
IEEE Xplore Part Number: CFP20N67-ART; ISBN: 978-1-7281-5374-2
made changes and how can make changes in our neural
network [5]. And also observed that, how they have
projected the results and what visualization graphs they
have used to project the results [6].
III. METHODOLOGY
LSTM is the most widely used type of RNN. LSTM is
mainly used for the sequence prediction problem. RNN has
encountered two significant problems, i.e., vanishing
gradients and exploding gradients. These two major
problems are solved using LSTM. The main reason is the
structure of LSTM, which helps to overcome these
problems.
Fig 1: LSTM architecture
LSTM has mainly three layers. One is the input layer, the
two are output layer, and hidden layer is shown in the
Figure 1of LSTM architecture.
The layers of LSTM architecture
Forget gate:
The Overlook entryway chooses what information ought
to be discarded or kept. Data from the past concealed
state and information from the current info is gifted the
sigmoid capacity. Qualities come out somewhere in the
range of 0 and 1. The more like 0 intends to overlook, and
in this manner the more like 1 intends to remain. [7].
Input gate:
To refresh the cell state, input door is required. Initially,
pass the past concealed state and current information into
a sigmoid capacity. That chooses which esteems will be
refreshed by changing the qualities to be somewhere in
the range of 0 and 1. 0 methods not significant, and 1
methods significant. Pass the shrouded state and current
information into the tanh capacity to get esteems between
- 1 and 1 to assist with controlling the system. At that
point duplicate the tanh yield with the sigmoid yield. The
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sigmoid yield will choose which data is essential to
remain from the tanh yield.
Output gate:
Last entryway is the yield door. The yield entryway
chooses what resulting shrouded state ought to be. The
concealed state is likewise utilized for forecasts. In the first
place, pass the past concealed state and in this manner the
current contribution to a sigmoid capacity. At that point
pass the recently altered cell state to the tanh work.
Duplicate the tanh yield with the sigmoid yield to settle on
a choice that, what data the shrouded state should convey.
The yield is the shrouded state. The new cell state and the
new shrouded state is then continued to the ensuing time
step.
It is one of the most straightforward architectures of
LSTM, known as Vanilla LSTM. It gives more significant
results for all sequential related prediction problems shown
in Figure 2.
Fig 2: Closer view of LSTM architecture
Dropout Layer Explanation:
It is a Methodology which helps a model to stay away
from overfitting. Overfitting alludes to a model in which
it models the Training data excessively well. It happens
when a model learns the nuances and disturbance in the
Planning data to the degree that it alternately impacts the
display of the model on new information. [8].
IV. PROPOSED ARCHITECTURE
Since the price of crude oil not only depends on the Supply
and Demand but it also depends on some External factors
like politics. These factors cannot be considered as a
feature to predict the price, so this model might not work
well in this kind of situation. It works only when the Data
contains the Price of the crude oil.
Sequential LSTM type of model has been used to predict
the price of crude oil. The proposed model consists of 4
LSTM layers with each layer having 50 neurons, and
another 4 are dropout layers and remaining are, one is a
dense layer with one neuron, and the other is the output
layer. Each LSTM layer has followed by one dropout layer.
The proposed model layers are shown in the Figure 3
Proposed model. All the inputs of the proposed model are
normalized for better results [9].
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 Proceedings of the Second International Conference on Inventive Research in Computing Applications (ICIRCA-2020)
IEEE Xplore Part Number: CFP20N67-ART; ISBN: 978-1-7281-5374-2

a. Input gate:

𝑖𝑡 = 𝜎 (𝑤𝑖 [ℎ𝑡−1 , 𝑥𝑡 ] + 𝑏𝑖 (5)

The above formula is the condition for the Input Gate

which mentions to us what new data is going to store in
the cell state [10].

b. Forgot gate

𝑓𝑡 = 𝜎 ( 𝑤𝑓 [ℎ𝑡−1 , 𝑥𝑡 ] + 𝑏𝑓 ) (6)

The above formula is the condition for the overlook

Entryway which encourages the information to dispose of
from the cell state.

c. Output gate

𝑜𝑡 = 𝜎 ( 𝑤𝑜 [ℎ𝑡−1 , 𝑥𝑡 ] + 𝑏𝑜 ) (7)

The above formula is the condition for the Yield entryway

which is used to give the activation to the last yield of the
LSTM block at timestamp 't' [11].

𝑖𝑡 → represents input gate

𝑓𝑡 → represents forget gate
𝑜𝑡 → represents output gate
𝜎 → represents sigmoid function
𝑤𝑥 → weight for the respective gate(x) neurons
ℎ𝑡−1 → output of the previous LSTM block (at
Fig 3: LSTM Proposed model timestamp t-1)
𝑥𝑡 → input at current timestamp
A.DATA PRE-PROCESSING 𝑏𝑥 → biases for the respective gates(x)
The data has been collected from the official website of The Underneath characterized conditions are condition
FEDERAL-RESERVE-BANK-OF-ST. LOUIS. Therefore, for the for the cell state, condition for the applicant cell
there is no need to process the data for missing values. state, and the condition for the last yield:
Make the model to be more specific and there is no need to 𝑐𝑡 → cell state (memory) at timestamp(t)
check for the outliers. 𝑐̅𝑡 → represents candidate for cell state at timestamp(t)
𝑐̅𝑡 = tanh(𝑤𝑐 [h𝑡−1, 𝑥𝑡 ] + 𝑏𝑐 ) (1)
So as to discover the memory vector for the current
timestamp (c_{t}), the inclination is resolved. Directly,
𝑐𝑡 = 𝑓𝑡 ∗ 𝑐𝑡−1 + 𝑖𝑡 ∗ 𝑐̅𝑡 (2)
from the above condition that can see at any given
timestamp, our cell state understands that what it needs to
ℎ𝑡 = 𝑜𝑡 ∗ tanh(𝑐 𝑡 ) (3)
ignore from the past state (i.e., f_{t} * c_{t-1}) and what it
needs to consider from the current timestamp (i.e., i_{t} *
c\'_{t}). All in all, channel the cell state and a while later it
B. Min max Scalar Method:
is experienced the order work which predicts what bit
should appear as the yield of the current LSTM unit at
All the inputs of the proposed model are normalized in the
timestamp t. Pass this h_{t}, the yield from the current
range of 0 to 1 for better results. This method uses linearly
LSTM impede through the SoftMax layer to get the
transformation technique such as
foreseen output(y_{t}) from the current square [12].
(𝑥−𝑚)
x to y=(𝑀−𝑚) (4) D. LOSS FUNCTION:

Where, m=min, M=max Mean_Squared_Error loss function is used here. The loss
function is used to measure mathematically, how wrong
C. Algorithm: our predictions are.

LSTM: ∑𝑁
𝑖−1(𝑃𝑟𝑒𝑑𝑖𝑐𝑡𝑒𝑑𝑖−𝐴𝑐𝑡𝑢𝑎𝑙𝑖 )²
RMSE = √ 𝑁
(8)
The Input gate equations in LSTM are written below:

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 Proceedings of the Second International Conference on Inventive Research in Computing Applications (ICIRCA-2020)
IEEE Xplore Part Number: CFP20N67-ART; ISBN: 978-1-7281-5374-2

V. RESULTS
 Step Size:

Take a step size or time steps of 3 (in a one-to-many

network), then it is ending up with input/output samples
([x0,x1,x2],x3),([x1,x2,x3],x4),...,([xT−3,xT−2,xT−1],xT)
(Using Rolling-windows), or
([x0,x1,x2],x3),([x3,x4,x5],x6),...,([xT−3,xT−2,xT−1],xT)
(Not using Rolling-windows). Using a batch size of 1, the
network input is (1, 3, n_features), where n_features is the
dimension of Xi (1 for a univariate time series, >1 for Fig 5: 30 looks back 120 epochs
multivariate time series).
2. 30 Timestamps and 120 epochs: From the Figure 5
 Epochs:
above, can see the Graph between real and predicted
When the entire Data set is passed once to the neural Crude oil price, when it takes 30 Timestamps and 150
network forward and backward through then it is epochs.
considered as one Epoch. It cannot handle the entire epoch The Test Data Root Mean Square Error is:1.658818723
once, so isolate it into few small batches. The Train Data Root Mean Square Error is: 1.504204886
The Difference between RMSE of Test Data and Train
Passing Data set once to a neural network makes the Data is
prototype suffer from updating the weights with a single RMSE Test Data ~ RMSE Train Data: 0.154613873
pass or one epoch is not enough.

As the quantity of ages builds, more occasions the loads

are changed in the neural system and the Model goes from
underfitting to ideal to overfitting bend.

 Choosing the right number of Epoch

The appropriate response is distinctive for various datasets

yet it says that the number of epochs is identified with how
diverse our data set is.

After trying various combinations of Step size and epochs,

finally can found the following combinations which give
results more accurately. Fig 6: 60 looks back 120 epochs

3. 60 Timestamps and 120 epochs: From the Figure 6

above, can see the Graph between real and predicted
Crude oil price, when it takes 30 Timestamps and 150
epochs.
The Test Data Root Mean Square Error is: 1.408214372
The Train Data Root Mean Square Error is: 1.407885705
The Difference between RMSE of Test Data and Train
Data is
RMSE Test Data ~ RMSE Train Data: 0.000328667

Fig 4: 30 looks back 150 epochs

1. 30 Timestamps and 150 epochs: From the Figure 4

can see the Graph between Real and predicted Crude oil
price when it takes 30 Timestamps and 150 epochs.
The Test Data Root Mean Square Error is: 1.15285714
The Train Data Root Mean Square Error is: 1.811941252
The Difference between RMSE of Test Data and Train
Data is
RMSE Test Data ~ RMSE Train Data: 0.659084112

Fig 7: 60 looks back 150 epochs

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 Proceedings of the Second International Conference on Inventive Research in Computing Applications (ICIRCA-2020)
IEEE Xplore Part Number: CFP20N67-ART; ISBN: 978-1-7281-5374-2
4. 60 Timestamps and 150 epochs: From the Figure 7
above, can see the Graph between Real and predicted
Crude oil price when it takes 30 Timestamps and 150
epochs.
The Test Data Root Mean Square Error is: 1.193295116
The Train Data Root Mean Square Error is: 1.307318471
The Difference between RMSE of Test Data and Train
Data is
RMSE Test Data ~ RMSE Train Data: 0.114023356
When the step size is 60, then it is getting better results
because in the span of 60 days, the oil price going
drastically high and falls low, so this change is considered
as one pattern. When the step size is 30, then the results are
not good as compared to the step size 60.
After trying various combinations of look backs and
epochs, finally it has been found the following
combinations which are shown in Table 1. These
combinations gave better results compared to others.
S.No Look Epochs Test Train
back RMSE RMSE
1 30 120 1.658818 1.504204
2 30 150 1.152857 1.811941
3 60 120 1.408021 1.407885
4 60 150 1.193295 1.307318
Table 1: Combinations of Step size and Epochs
Impact of epochs on results:
The quantity of ages is identified with the quantity of
rounds of improvement that are applied during preparing.
With more adjusts of improvement, the blunder on
preparing information will lessen further and further;
notwithstanding, there may come a point where the system
becomes over-fit to the preparation information and will
begin to lose execution regarding speculation to non-
preparing (inconspicuous) information. To dissect this, can
screen the mistake execution on isolated testing
information, as the quantity of ages increments.
VI. CONCLUSION
From the Above RMSE Errors, the difference of Test
RMSE and Train RMSE of combination 60 look back
with 120 epochs gives us a result of 0.000328667 which
is better when compared to other combinations. Hence
this combination gives us more accurate results. Hence,
built a sequential LSTM type of model that has been used
for crude oil price prediction.
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The proposed model consists of four LSTM layers with
each layer having 50 neurons, 4 dropout layers and
remaining are, one is a dense layer with one neuron, and
the other is the output layer. Each LSTM layer has
followed by one dropout layer. 60 step size and 120
epochs give accurate Results. All the inputs of the
proposed model are normalized for better results.
It deals with different step sizes and epochs and finally
found the correct numbers to get the better accuracy.
REFERENCES
[1] The input Data is collected from
https://fred.stlouisfed.org/series/DCOILBRENTEU.
[2] Predicting Stock Prices Using LSTM Murtaza
Roondiwalal Harshal Patel2, Shraddha Varma3
Undergraduate Engineering Students, Department of
Information Technology, Mumbai University
https://pdfs.semanticscholar.org/3f5a/cb5ce4ad79f08
Difference 024979149767da6d35992ba.pdf
of RMSE [3] Long Short-Term Model for Brent Oil Price
Forecasting Harsh Salvi1, Avdhi Shah2, Manthan
Mehta3, Prof. Stevina Correia4 1, 2, 3, 4Student,
0.154613 4Faculty, Department of Information Technology,
Dwarkadas J. Sanghvi College of Engineering,
Mumbai, India
0.659084
http://ijraset.com/fileserve.php?FID=25667
[4] Crude Oil Prediction Using LSTM Nidhi Moitra,
0.000328 Priya Raj, Sanidhya Saxena, Rohit Kumar
Department of Information Science and Engineering
Dayanand Sagar Academy of Technology and
0.114023 Management Bengaluru, India
https://www.ijisrt.com/assets/upload/files/IJISRT20F
EB503_(1).pdf
[5] Crude Oil Price Prediction Using LSTM Networks
Varun Gupta, Ankit Pandey
https://publications.waset.org/10008992/crude-oil-
price-prediction-using-lstm-networks
[6] A modified neural network model for predicting the
crude oil price Author links open overlay panel
Mohammad RezaMahdianiEhsan
https://www.sciencedirect.com/science/article/pii/S1
822801116300121
[7] Y. Jeevan Nagendra Kumar, Dr. T. V. Rajini
Kanth, “GIS-MAP Based Spatial Analysis of
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[8] B Sankara Babu, A Suneetha, G Charles Babu, Y.
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229~240
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Kiran, Partapu Preetham, Chila Lohith, Guntha Sai
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IEEE Xplore Part Number: CFP20N67-ART; ISBN: 978-1-7281-5374-2

Roshik, G. Vijendar Reddy, "A Data Science View
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[10] Ledalla, S. & Mahalakshmi, T.S.. (2019).
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AUTHOR PROFILE
from Acharya Nagarjuna University, Guntur and
M.Tech in Computer Science Technology from Andhra
University, Visakhapatnam. Having over 18+ years of
academic and research experience.
He is having Life Membership in Indian Society for
Technical Education (LM ISTE) and International
Association of Engineers (IAENG).
He is received appreciation Letters for NAAC, NBA, x-
Kernel, Robotic Club, J-Lab J-Hub JNTUH Coordinator.
He is published around 18 research papers in various
Scopus Indexed Journals and organized 15+ FDPs,
Workshops in the Organization.
He is a National Advisory Board member and
Technical Program Committee member for NGCT,
ICSET, IJAC, WCAET Conferences and Journals.

Dr. Yalla Jeevan Nagendra Kumar, He is acted as Strategic Planning Committee member,
Professor of IT and Dean Technology BoS Member, Project review committee member, Jury
and Innovation Cell - GRIET, completed member for NIFT- Hyderabad and Vice-President,
Ph.D in Computer Science Engineering Convener for MHRD – IIC GRIET Chapter.

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