The best way to conference proceedings by Francis Academic Press

Web of Proceedings - Francis Academic Press
Web of Proceedings - Francis Academic Press

Analysis of the Factors Affecting Oil Prices

Download as PDF

DOI: 10.25236/eiemss.2021.053


Ruoqi Li

Corresponding Author

Ruoqi Li


The aim of this paper is to discuss the factors affecting oil prices and explore the interconnection and interrelationships among them. The method used for analysis is taxonomy, in which all the factors are classified into two main categories: exogenous and endogenous. The latter can be further divided into supply side and demand side. In the exogenous side, two factors are most relevant, which are major cycle and USD. In the endogenous side, the supply side includes US shale oil production, inventory Kitchen cycle, OPEC, whereas the demand side includes natural demand, financial speculation hedging demand. After further analyzing the factors‘ impact on oil prices, the final summary can be reached that in the 20th century, mainly OPEC and the major cycles are the driving forces. However in the 21th century, OPEC gradually lost its absolute dominance in its pricing power of oil markets and made way for US shale oil and other new oil producer countries, and suffered from the countereffect of global forces such as USD.There are also factors with minor fluctuation that constantly affect oil prices, such as the Merrill Cycle/Inventory Kitchin cycle, and financial speculation hedging demand. And there’s always natural demand interacting with oil prices.


Oil crisis, oil, crude oil, US, economy, the US market, OPEC