Fluctuations In Oil Prices To Factor Analysis And Empirical Testing

China's oil consumption and import dependency increase quickly every year with china's economic development and industrialization process speeds up. The importance of the oil on China's economic development is self-evident.therefor exploring the reasons which influence oil price fluctuation is a practical significative research.The paper reviews the theory of oil price determination, including the oil market structure theory, OPEC impacting on oil price and the theory of multi-factor. The describes the world oil market situation, several trade price indices. status of the world oil market include oil reserves, consumption and production.With the research method, the factors that will determine the price oil will be divided into three parts:a long-term fudamental factors such as supply, demand, the dollar index, oil saves; second part is the short-term monetary and financial factors, such as crude oil futures,stock market,liquidity,financial speculation;the third part is the other unexpected emergencies, such as political instability, war, abrupt climate changing. The main conclusions of the paper is as follow:1.Oil price have more determining factor.in the long term, consumptions, producitons, stocks, dollar index, monetary and financial factors have a decisive role on the prices. in the short time, consumptions, productions, stocks, the dollar index have little effect on oil prices. The variables of oil price, consumptions, productions, crude oil stocks of usa and exchange rate of us dollar have long-term equilibrium relations.2.Oil consumptions raising 1 percent will cause oil price rising 27.29 percent. Crude oil productions raising 1 percent will cause oil price falling 3.63 percent. USA oil stocks raising 1 percent will cause oil price falling 5.63 percent. US exchange rate raising 1 percent will cause oil price falling 0.97 percent. Consumptions, productions, US exchange rate,stocks could only explain 10.3 percent.In the short term, monetary and financial factors, unexpected events, political factors, climate factors largely determine changes in oil price.