– This is the script of CNBC's news report for China's CCTV on June 8, Thursday.
Welcome to CNBC Business Daily, I'm Qian Chen.
Oil prices slid more than 5 percent on Wednesday after the U.S. government reported an unexpected increase in crude inventories, fanning fears that output cuts by major world oil producers have not drained a global glut very much.Crude stocks in the United States grew 3.3 million barrels to 513 million barrels, according to the U.S. Energy Information Administration (EIA). That confounded forecasters who had predicted a drop of 3.5 million barrels.
Oil futures had already been lower earlier on Tuesday on renewed concerns about the efficacy of OPEC-led production cuts, as tensions rose within the export group over Qatar and U.S. output continues to grow.
Gasoline inventories also unexpectedly rose, imports increased, and exports dropped, the EIA data showed.
Gasoline stocks rose by 3.32 million barrels, compared with analysts' expectations in a Reuters poll for a 580,000 barrels gain. Distillate stockpiles, which include diesel and heating oil, rose by 4.35 million barrels, much higher than the market's expectation, the EIA data showed.
There was another factor to furthur dampen oil prices overnight. S&P Global Ratings revised Qatar sovereign credit outlook to creditwatch negative from negative; current rating from AA down to AA- after six arab countries severed ties
S&P says tha dispute with Arab countries will exacerbate Qatar's external vulnerabilities and could put pressure on economic growth as well as fiscal metrics. At the same time, Qatar's fiscal and current account deficits could widen as related revenues from regional trade diminish.
The Qatari Riyal continued to fall against the U.S. dollar in the spot market in late trade on Wednesday due to concern about the long-term economic impact on Qatar of its diplomatic rift with other Gulf Arab states.
The Qatari riyal is fixed in an extremely narrow range with the greenback, but the central bank's commitment to the peg has been tested since the start of the week. Experts widely believe that the Qatari central bank would support its currency and maintain the beg mechanism.
CNBC's Qian Chen, reporting from Singapore.