China Oil Price-GDP Elasticity Coefficient and Optimal Strategic Petroleum Reserve Scale Analysis

The rising international oil prices will cause the loss of national GDP and the establishment of strategic petroleum reserves (SPR) could avoid this loss as much as possible. The oil price-GDP elasticity coefficient is an important parameter in calculating strategic petroleum reserve, but since it is difficult to obtain, it is also hard to calculate. This paper provides the fitting formula of oil price-GDP elasticity coefficient based on the regression analyzing of literature data. China’s oil price-GDP elasticity coefficient in recent years has been analyzed and predictions for future trends in different situations have been made. Finally, the predicted oil price-GDP elasticity coefficient is used to calculate the size of China's strategic petroleum reserve and its earnings.