Empirical Study on International Oil Price and Oil Consumption

This paper researches on the co-integration and causality relationship between international oil price and oil consumption for USA, Japan, France, China, India and Brazil. The results show there is co-integration between the two variables except oil consumption of India and Brazil, while bidirectional Granger causality from oil price to USA's oil consumption, unidirectional Granger causality from oil price to oil consumption for Japan and France, while no Granger causality from oil price to China's oil consumption. Thus the growing China's oil consumption is not the reason of the increase of international oil price which denied the 'China threat' effectively.