International Crude Oil Prices Affect The Mechanism Study

Crude oil, which is called "blood of industry ", its price volatility is always all aspects of attention. After entering the 21st century, the international oil prices soared and fluctuated strongly. China is the world's second-biggest importer of crude oil, whose influence on international crude oil price can't be ignored. This paper tries to discuss the factors play what influences on international crude oil prices.The first part of this paper summarizes the theoretical research on the international oil price influence factors, including demand and supply, futures market, monetary policy,etcThe second part is studied on the supply and demand balance, crude oil futures market and impact from a country's monetary policy. Using "overshooting model" to explain why looser monetary policy could lead to higher oil price. Finally also puts forward a stock market with the international oil prices may contact between.The third part is studied on how Chinese factors impacting on international crude oil price, especially Chinese GIP and M1. Finally discussed the likely connection between H-shares index and crude oil price.The fourth part for empirical part, based on the Frankel model, added Chinese factors, respectively for international oil prices current factors affect multiple linear regression, multiple linear regression model with some lagged quantities, VAR model and VEC model. Conclusion is, in the short run, Chinese factors on the influence of international oil prices is not significant. In the long run, China's industrial gross domestic product on international oil prices will form a positive impact, but the degree is much lower than the impact from America.The last part summarizes the above research conclusion, suggests when China considering its crude oil strategy, long-term oil prices can be considered as an endogenous variable, and the future research direction was discussed.The innovations of this paper are:1) laying the macro economic variables of China with macro economic variables of America in a unified framework to study their effects of international oil prices; 2) using "overshoot model" to study how loose monetary policy "overshooting" the crude oil price; 3) discussing the connections between relevant Chinese stock index and international oil markets.Since the data conditions and the author in this paper level is limited, the analysis of still superficial and inaccuracies, need to be fixed perfected. Hope in the conditional circumstance, can focus on influence international oil price one kind of Chinese factors are more in-depth discussion.