Acceso usuarios
China’s oil imports have increased significantly and will play a bigger role in the future. We incorporate the “China factor” into oil price. The main findings are (1) long-run trends of oil price are determined by oil supply and demand; emergencies would cause oil price volatility in the short run; (2) macroeconomic effects of oil price increases depend on the underlying factors that drive oil price; (3) China’s oil import, which can only explain 4.6 percent of oil price change, has a relatively small influence on oil price volatility; but (4) China affects the long-run trends of oil price by changing the fundamentals of the oil market, especially after financial crisis.
