UPDATE 8-Oil falls from $40 as doubts emerge over next step on OPEC cuts

* Brent crude climbs above $40 for first time since March
* U.S. crude stockpiles fall 2.1 million barrels in week -
EIA
* Producer group yet to agree on early meeting -sources

(New throughout, updates prices, market activity and comments,
adds EIA; new byline, changes dateline, previous LONDON)
By Jessica Resnick-Ault
NEW YORK, June 3 (Reuters) - Oil fell on Wednesday after
jumping for awhile above $40 a barrel, the highest since March,
then retreating as doubts emerged about the timing and scale of
a potential extension to the pact between OPEC and its allies to
cut crude supplies.
Oil prices were also were pressured as U.S. refined product
inventories surged in the week, raising concerns about demand.
EIA/S
“As product demand remains subdued, gasoline inventories
showed a solid build, while distillates showed a mammoth one -
despite refinery runs being over 3.6 million barrels per day
below year-ago levels,” said Matt Smith, director of commodity
research at ClipperData.
Saudi Arabia and Russia have a deal to extend oil output
cuts by a month, but a policy meeting on Thursday rather than
later in June is unlikely, sources said. Earlier in the session,
oil fell when Bloomberg reported the Thursday meeting was in
doubt.
"Prices were firm so far this week on the news that the
meeting was earlier," said Olivier Jakob, oil analyst at
Petromatrix. "The retracement today is definitely due to the
latest headlines on OPEC."
Brent crude futures for August LCOc1 were down 13 cents,
or 0.3%, at $39.43 by 10:48 a.m. EST (1548 GMT). The session
high of $40.53 was the highest since March 6. West Texas
Intermediate (WTI) crude for July CLc1 fell 3 cents, to
$36.78.
Both benchmarks have surged in recent weeks, with Brent more
than doubling after hitting a 21-year low below $16 in April,
when U.S. crude turned negative.
The OPEC+ group, comprising the Organization of the
Petroleum Exporting Countries and allies including Russia, is
cutting output by 9.7 million barrels per day (bpd) in May and
June, equal to about 10% of global output before the coronavirus
crisis.
The talks have been focusing on keeping the current level of
cuts beyond June. But a one-month extension would be shorter
than some sources have said was under consideration.
Oil also weakened on reports that Gulf OPEC producers are
not discussing extensions to their deeper voluntary production
cuts beyond June.
Pointing to demand recovery, the services sector in China,
the world's second-biggest oil consumer, returned to growth last
month, a survey showed. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
CHART: Brent oil may rise into $41.51-$42.17 range
changes in petroleum stocks in the U.S. https://tmsnrt.rs/3fMVOzX
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