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.