Level 1 — Absolute Beginner
Oil is a very important thing for the world. People use it for cars and ships. On Friday, the price of oil went down.
One barrel of Brent oil cost about 99 dollars and 68 cents. That is less than 100 dollars. The price fell by about two and a half percent.
The news about new jobs in the United States was weak. Stock prices went up that day. But the sea road at Hormuz is still a problem.
- oil
- a thick liquid used to make fuel
- barrel
- a large container for oil
- price
- how much money something costs
- fell
- went down
- stock
- a small part of a company that people can buy
- weak
- not strong
- jobs
- work that people do for money
- problem
- something difficult
Level 2 — Elementary
The price of Brent crude oil fell back below 100 dollars a barrel on Friday, October 2. It closed at about 99.68 dollars, down 2.57 percent from the day before.
The drop came after a weak report on jobs in the United States. Fewer people got new jobs than experts had expected. Many traders now think the central bank will not raise interest rates soon.
Stocks rose on the same day. The Dow gained 250.88 points to 51,177.44. The Nasdaq rose 1.19 percent to 27,190.86. Even so, oil traders are still nervous. Ships cannot move freely through the Strait of Hormuz, and some oil wells have been closed because of the war.
- crude oil
- oil as it comes out of the ground
- barrel
- a unit used to measure oil
- interest rate
- the cost of borrowing money
- expected
- thought likely to happen
- trader
- a person who buys and sells in markets
- central bank
- the bank that controls a country's money
- nervous
- worried
- closed
- stopped working
Level 3 — Intermediate
Brent crude slipped 2.57 percent to about 99.68 dollars a barrel on Friday, dropping back under the symbolic 100 dollar mark after a disappointing September jobs report. Fewer American workers found positions than economists had forecast, and traders concluded that the Federal Reserve is now less likely to raise interest rates.
Wall Street welcomed the news. The S&P 500 advanced 0.49 percent to 7,722.93, the Nasdaq Composite climbed 1.19 percent to 27,190.86, and the Dow Jones Industrial Average added 250.88 points to close at 51,177.44. Treasury yields fell at first before partly rebounding, which pulled stocks back from their best levels of the session.
The oil market, however, is still tied to events far from Wall Street. Flows through the Strait of Hormuz and the Bab el-Mandeb strait remain constrained, and the United States Energy Information Administration says crude production shut in by the disruption averaged 6.7 million barrels a day in August, up from 5.0 million in July. A tanker struck off Oman early on Saturday is a reminder of how quickly sentiment can turn.
- symbolic
- representing an idea rather than having practical meaning
- disappointing
- less good than hoped
- forecast
- to predict a future result
- yield
- the return an investor earns on a bond
- rebound
- to recover after a fall
- constrained
- limited or restricted
- disruption
- a break in normal activity
- sentiment
- the general mood of investors
Level 4 — Advanced
Brent crude retreated 2.57 percent to roughly 99.68 dollars a barrel on Friday, slipping beneath the psychologically important 100 dollar threshold as a soft September jobs report reshaped expectations for American monetary policy. With hiring well short of forecasts, traders concluded that a Federal Reserve rate increase, which had loomed over markets, is now far less probable.
Equities rejoiced. The S&P 500 gained 0.49 percent to 7,722.93, the Nasdaq Composite surged 1.19 percent to 27,190.86 and the Dow added 250.88 points to finish at 51,177.44, although a late rebound in Treasury yields trimmed gains from their intraday highs.
Crude's relief may prove fleeting. The physical market remains hostage to chokepoints: traffic through Hormuz and the Bab el-Mandeb strait is constrained and erratic, and the Energy Information Administration estimates that output shut in by the disruption averaged 6.7 million barrels a day in August, up from 5.0 million in July. A renewed American blockade of Iranian exports and fresh Treasury sanctions have tightened supply further, while the tanker strike off Oman early on Saturday shows how swiftly the risk premium can return.
- psychologically
- relating to the effect on people's thinking
- monetary policy
- central bank decisions about money and interest rates
- loomed
- appeared as a worrying possibility
- equities
- shares of companies
- trimmed
- reduced slightly
- fleeting
- lasting only a short time
- chokepoint
- a narrow passage where traffic can be easily blocked
- risk premium
- extra price demanded by investors for taking on danger
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