Abstract: Based on previous papers, this article analyzes the three influencing factors of oil price, including demand, supply and speculation, and constructs whole-sample VAR model without consideration of business cycles and sub-sample VAR models with the consideration of business cycles. The comparison on the result of impulse response and variance decomposition verifies three opinions proposed according to the character of oil price and economic theory: oil price was based on expectancy; oil demand was leading influencing factors, while the influence of oil supply and speculation was little during the whole period; the influencing effect and relative importance of the three factors were different under different business cycles. The result helps to understand the pattern of fluctuation of oil price, and sheds light on the oil policy of China.