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UPDATE 6-Brent falls towards $109 as storm knocks demand

Alice Baghdjian
Tuesday, 30 Oct 2012 | 2:53 PM ET

* Sandy leaves New York, eastern U.S. crippled

* U.S. Energy Dept. delays weekly inventory report by a day

* Storm forces two-thirds of U.S. East Coast refineries to shut

* Coming Up: U.S. API weekly oil stocks; 2030 GMT

(Updates throughout; paragraphs 1, 3-6, 8-10, 13)

LONDON, Oct 30 (Reuters) - Brent crude fell towards $109 on Tuesday on concerns about weak demand from the U.S. East Coast in the aftermath of storm Sandy, that swept through the area shutting refineries, roads and airports.

The storm, one of the largest ever to hit the United States, shut two-thirds of the region's refineries, its biggest pipeline and most major ports.

Brent crude for December fell 32 cents to $109.12 a barrel by 1410 GMT, after falling to a low of $108.70. U.S. crude for December was up 40 cents at $85.94.

Products were also lower, as U.S. gasoline futures fell nearly 2 percent to around $2.7087 a gallon, after climbing more than 5 cents on Monday on expectations of tighter supply.

``The weakness in Brent may be because of the refinery closures on the eastern seaboard of the states,'' said Christopher Bellew, a broker at Jefferies Bache.

``People may be reassessing that actually because there have been no aeroplanes flying, no buses, no cranes moving around, there will be a lower usage of oil,'' he said.

Sandy paralysed much of the East Coast, shutting air, ship, rail and even highway services and knocking out power to more than 2.8 million homes and businesses.

Initial reports suggested the biggest U.S. East Coast refinery in Philadelphia appears to have emerged undamaged from the storm and a smaller nearby plant operated without trouble.

But investors waited for news of any damage to the network of oil terminals, pipelines and trucking facilities in the region which could complicate supply logistics.

``It's very clear that it's a very vast energy infrastructure network in that region and its going to be impacted in some way, in terms of all the logistics to transport oil and oil products,'' said Bjarne Schieldrop, an analyst at SEB in Oslo.

BP Plc Chief Executive Bob Dudley said Sandy had disrupted fuel logistics in the U.S. North East but supplies should ``bounce back quickly''.

OIL STOCKS

The American Petroleum Institute said on Monday it had not yet delayed the release of its weekly petroleum stocks report but would continue to assess conditions.

But the U.S. Energy Department said it was delaying its weekly petroleum inventory report and could publish it on Thursday, depending on the extent of the storm damage.

Analysts, in a preliminary poll by Reuters, expect U.S. crude inventories to rise by 1.5 million barrels for the week ended Oct. 26.

(Additional reporting by Florence Tan in Singapore; editing by Keiron Henderson)