The Determinants of Endogenous Oil Price: Considering the Influence from China

Boqiang Lin () and Jianglong Li

Emerging Markets Finance and Trade, 2015, vol. 51, issue 5, 1034-1050

Abstract: 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.

Date: 2015
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DOI: 10.1080/1540496X.2015.1041844

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