The Impact Factor Of International Crude Oil Price Volatility Study

Crude oil is the most important resource product in the development of modern industry and economy. The price of crude oil is the main price indicator of raw and processed materials. The wide range of price variation of crude oil has a great influence on the trend of world's economy, especially our country--China, which has a huge demand of crude oil. Since 2002, with the changes of the situations of world's economy, the trend of oil price also has a change which is completely different from last century. In recent years, there is a huge rise of crude oil price with severe fluctuate. The range of fluctuate is more than ever before. The new trend of crude oil price has a great effect on the economy of a lot of countries. To study the reason of why crude oil price fluctuate so severe is the aim of this paper.This article combines theories, demonstration and analysis with comparison, and researches the process of crude oil price changed from 2002 to 2011 and the time before. As result, before 2002, the changes of international crude oil price are mainly due to the reason of the relationship between supply and demand and international political reasons. During this period, the major causes of fluctuations of crude oil price are changes of political situations. Without the influence of political reasons, the price of crude oil did not fluctuate often. But during 2002 to 2011, the international crude oil price keeps to rise with fierce wave. The opinion of this article is that after we entered the 21st century, the financial and speculate reasons are becoming the main reasons which could influence the international crude oil price step by step. Because of US dollars keeps to devaluate since 2002 and the markets of estate and financial deviants collapsed in the financial crisis, a huge amount of fluidity flowed over into the market of crude oil futures. Crude oil futures become the mainly target of investment of international hedge funds and famous investment banks like Morgan Stanly and Goldman Sachs. And, the demands of development countries like China are keeping rise recently. Combined such reasons, we may understand why crude oil price fluctuate so severely.Because of that, this article demonstrates the influence of financial and speculates reasons to the changes of crude oil price. It mainly adopts the method of Cointegration Test, Granger Causality Test, Vector Error Correct Model and Impulse Responses Functions. The result shows that the financial reasons and speculations indeed have great influence on the fluctuation of international crude oil price.