The quantitative relation between liquid output of an oil well and pressure at the mouth and the bottom of the well is studied by using the theory of hydrokinetics.The relation exchanging liquid output of the oil well for the pressure at the mouth of the well equivalently is given.The processing method for observation data of oil well dynamic is studied further.Taking Dong shui-3 well in Shengli oil field as an example,processing of observation data of the well is made and effect of radius of outlet pipe on flow of the pipe and equivalent water level is studied.