Analysis Of Changes In Oil Prices And Research On China’s Oil Security Strategies

China’s rapid economic development brings growing dependence on imported oil. Analyses of factors influencing oil prices and researches on laws of changes in oil prices provide a crucial support for business investments of enterprises, national policy-making on oil and oil security strategies. It is of great importance to the sound development of economy and national security. In this thesis, Regression model is employed to investigate characteristics of oil production behavior and formation model of oil prices of OPEC; oil prices of different scales are analyzed with the decomposition analysis method on the basis of empirical mode decomposition algorithm, meanwhile influence factors and characteristics of oil prices at different scales are summarized in the light of the qualitative analysis method; On the basis of empirical mode decomposition algorithm, changes in oil prices, before and after the impact of three different unexpected supply disruptions, caused by strikes, revolutions and wars, are analyzed in combination with international politics and features of emergencies; in the end, counter measures to protect China’s oil security are proposed. Thus, main conclusions are drawn as follows:(1) Oil prices are mostly determined by long-term trend prices, impact of mid-term adjustments and imbalance of short-term market supply and demand. Long-term trend prices, a reflection of oil prices of the steady market, are together determined by prices of alternative energies, purchasing power of oil consuming countries and competitions between non-OPEC oil-producing countries and OPEC. Long-term trend prices provide a reference for changes in oil prices. In particular, there is a tendcy to return to long-term trend prices when a comparatively bigger gap between the oil price and long-term trend prices emerges. However, for most of the time, oil prices tend to be higher or lower than long-term trend prices in a large amount.(2) Changes in oil prices before and after the supply disruptions due to the impact of emergencies are dependent on factors as follows: the scales of disruption, the recovery time for direct supply disruptions, the possibility of triggering off other accidents that may cause new supply disruptions by existing emergencies, approaches of OPEC to cope with the disruptions and international interventions in emergencies. During the time period of supply disruptions, oil prices consist of the trend oil price and the speculative price. On one hand, the trend oil price, the reflection of the real relation of market supply and demand, is agreeable with the real oil price; on the other hand, the speculative price mirrors radical changes of short-term operation behaviors manipulated by the market.(3) The amount of OPEC member countries that support the incomplete market share model accounts for the most, whereas OPEC has got the inclination for market share model on the whole. The strategic policies and actual behaviors of OPEC are flexible, and it makes useful adjustments according to the changes of influence factors at the right time. When the rise of oil prices leads to a great loss of market share, OPEC will increase oil production; when there is a sharp drop in oil prices, OPEC will cut oil production quotas to prevent it. Currently, OPEC has a strong control of the oil market, and in the meantime non-OPEC countries don’t have the competitive power to challenge it. In the future, the supply position of OPEC will have a further rise. For OPEC, the core member countries and some of the middle member countries play a leading role in the overall control of oil production, while there is little difference of influence on the oil production between edge member countries and non-OPEC ones. There is a positive correlation between oil production and quotas of OPEC. The limited quantity of oil in excess of quota by some member countries hardly has any influence on OPEC. Consequently, OPEC reaches the goal of raising oil prices by setting quotas.(4) It is essential to increase income and reduce expenditure to guarantee China’s oil security. Cooperation with host countries of the resources and countries of consumption is necessary, too. Ways listed as follows are of great significance to protect China’s oil security: expand the scale of strategic oil reserve; increase the domestic oil exploration; participate in overseas oil exploration and development for oil production; vigorously develop the technologies of alternative energies; maintain the oil price in a low level while keep an economical oil consumption; diversify the routes of imported oil transportations; strengthen the ability to cope with emergencies like unexpected oil supply disruptions.