The Study On Countermeasure Mechanism Of International Oil Price Fluctuation Shocks

With the sustained and steady economic growth, China's crude oil and refined oil consumption increased year by year, becoming the world's second largest oil consumer. The gap between oil supply and demand becomes more and more increasing the dependence on foreign oil which became more than 50% of the international warning line in 2009. In other words, more than half of the crude oil demand depends on imports. Therefore, the international oil price fluctuations will inevitably produce a growing impact on the domestic economy. In recent years the intensity of international oil price fluctuations exceeded expectations. With the rapid development of international financial markets, the financial property of international oil price is being constantly strengthened. The impact of futures speculation and the dollar exchange rate index on the international oil price fluctuations is increasing. In this context, it has important theoretical and practical significance for the development of China's long-term oil development strategy to ensure oil security and economic stability to solve the problems of how to effectively deal with the shocks from international oil prices fluctuations.Based on existing literature at home and abroad, this paper explores the following three aspects with theoretical and empirical research:First, identify "the source" of the exogenous shocks:analyze the factors of international oil prices fluctuations empirically; Secondly, understand the impact of the international oil price fluctuations on Chinese macro-economy and further clarifies a variety of channels and transmission mechanism of the impact; Thirdly, analyze the current response of the government and its problems; Finally, make policy recommendations for dealing with the shocks of international oil prices fluctuations combined with the experience of other countries.To this end, the paper frame as follows:The first chapter is an introduction, describing the research background and significance of this article, and summarizing the full text of research ideas and innovations; the second chapter is the study of the main driving forces of international oil price fluctuations, analyzing the reasons of international oil fluctuations empirically considering market supply and demand, futures speculation, the dollar exchange rate and other factors; chaptersâ…¢andâ…£respectively introduce the impact and transmission mechanisms of the international oil price fluctuations shocks on China's economy, and show a detailed analysis of our current response of the government (that is domestic Refined oil pricing mechanism under government control) and its problems; chapterâ…¤introduce the experience of other countries in response to the international oil price shocks; chapterâ…¥make policy recommendations for dealing with the shocks of international oil prices fluctuations.Through theoretical and empirical analysis, this paper found:(1) Futures speculation forces have become the major reason for the international oil price fluctuations. In addition to fluctuations in international oil prices themselves, futures speculation is the greatest factor in the short term which contribution rate of 15%, exceeding the market demand factor, but its impact declines gradually in three months; In the long run, market demand factors will be the main promotion of international oil prices fluctuations, but speculation is still playing a significant impact on oil price, and the contribution rate of speculation remained at 10% in 9 months. In addition, the U.S. dollar exchange rates also significantly affect the changes of international oil prices, and the impact of market supply and crude oil reserves is relatively weak.(2) The international oil prices fluctuations will have a significant impact on the domestic economy. The increasing of international oil prices will not only directly lead to a decline in our level of output and price levels increase, but also cause tightening monetary policy and exchange rate depreciation and thus produce an indirect effect on output; as government regulation of oil prices, the impact of international oil price fluctuations on the domestic economy have been reduced and significant lagged; international oil price shock was not able to significantly reduce China's energy consumption intensity, which means that the international oil price shock did not effectively promote domestic energy efficiency.(3) From the perspective of China's current response for international oil price shocks, the domestic refined oil pricing mechanism become the main policy tool to reduce the shocks of international oil prices fluctuations in the current cases that domestic oil reserve system is not fully developed. In short-term, it plays a cushioning effect for a certain degree. But it is not conducive to improve our long-term ability to cope with the shocks of international oil prices fluctuations. The new oil pricing mechanism implemented in 2009 narrows the gap between changes in international oil prices and the domestic oil prices and promotes domestic enterprises to improve their energy efficiency and energy consumption structure change to a certain extent, which will help to avoid oil price risk in the long run. However, it doesn't fully reflect the relationship between China's oil supply and demand, and lack of initiative influence on the international crude oil prices, so it needs further reform and improvement.(4) From the perspective of other countries practice experience, the short-term buffer mechanism for international oil fluctuations includes making use of oil reserve system and developed futures markets to hedge price risk, and long-term buffer mechanism is utilizing market mechanisms to optimize energy consumption structure and increase their efficiency in the market pricing mechanism, and improving the oil tax system to adjusting supply and demand behavior.In summary, this paper include that the optimal response is a package of responses including active use of the oil futures market, improvement the oil stocks, promoting refined oil pricing system reform and oil tax system. First, China should speed up the construction of oil reserve system and futures markets, and enhance the ability on pricing of international oil price and risk-averse, in order to improve our response to short-term fluctuations in international oil prices and less the refined oil pricing mechanism's functions of "buffer the impact of short-term international oil prices". On this basis, the Government should speed up the market of refined oil pricing mechanism reform, let it reflects the long-term change in trend in crude oil costs in order to play the market regulation functions of price for resource allocation to gradually increase the energy efficiency and optimize energy consumption structure, and continuously improving our long term ability to deal with the international oil price shocks. Finally, China should accelerate the improvement of China's crude oil and refined oil production and consumption tax system, which should be used to regulate the supply and demand behavior effectively, and establish the long-term mechanism of optimal response on the shocks of international oil price fluctuations.