Identification and Analysis of the Breaking Point of Oil Price

Along with the responsiveness of international oil prices on various events increased and the marketization of China's oil price system reform,the frequent mutation of oil prices have a huge impact on the steady development of Chinese macroeconomy.However,different inducing factors and unexpected events emerging in the breaking point of the oil price occurred occasionally because of changing in economic environment and core influencing factors of oil price. These necessitate the practical need for indentifying and analyzing when and how the breaking point of oil takes place. Based on this,this paper gives the definition of the tolerance threshold and mutations of commodity price,and applies the PPM model to distinguish and analyze the mutations of the oil price and related effect factors. The results show eight significant breaking points of oil price. In the second quarter of 1999,breaking point of oil price was directly caused by the Asian financial crisis,the root cause is that the imbalanced structure of oil supply and demand. Specifically,the oil suppliers undersetimated the oil demand of the market and China's net imports increased,as a result,a rapid decline the market underestimated of oil supply appeared in oil prices and a dramatic rebound in the short term. In the next seven breaking points of oil price,the US dollar index was one of the main direct causes. And geopolitical events and the anticipated changes or demand changes driven by economic conditions became the foundation of breaking point of oil price. At the same time,demand growth from emerging economies is also becoming a new factor for the breaking point of oil price.