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UPDATE 7-U.S. gasoline, heating oil pull back, crude oil mixed

Robert Gibbons
Tuesday, 30 Oct 2012 | 5:28 PM ET

* U.S. gasoline, heating oil futures drop as storm hits demand

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

* U.S. EIA delays inventory report, API to release on Tuesday

* Some refineries without power, others restart after storm

* Coming Up: API oil stocks data; 4:30 EDT Tuesday

(Recasts with updated prices, market activity; changes byline and dateline, previous LONDON)

NEW YORK, Oct 30 (Reuters) - U.S. gasoline and heating oil futures pulled back on Tuesday on the expected enormous hit to demand for fuel after Hurricane Sandy cut a destructive path across the East Coast of the United States.

Benchmark Brent crude futures eased and U.S. crude edged up in choppy, low volume trading, as many market participants in the U.S. Northeast were among the millions of people confronted with scenes of the destruction left by Sandy after the monster storm smashed into the New Jersey coast.

More than eight million homes and businesses were left without power in the eastern United States as Sandy paralyzed much of the region, shutting air, ship, rail and highways.

``The demand destruction may be the biggest since right after the attacks of September 11 (2001),'' said Phil Flynn, analyst at Price Futures Group in Chicago.

U.S. front-month November RBOB gasoline fell 3.88 cents to $2.7180 a gallon by 12:55 p.m. EDT (1655 GMT), having dropped as low as $2.6916.

Gasoline futures reached $2.8115 a gallon in Monday's session, having rebounded after slumping to $2.5690 on Oct. 23.

November heating oil futures , the U.S. benchmark for distillates, were down 3.02 cents at $3.0850 a gallon, having fallen as low as $3.0675. Prices on Monday reached $3.1495, the highest since Oct. 19.

The November refined products contracts expire on Wednesday.

U.S. December crude was up 30 cents at $85.84 a barrel, having reached $86.24. Prices fell to $84.66, their lowest since July, during Monday's session.

``I think (U.S.) crude is getting a lift because there was less damage than anticipated and the refineries will be coming back up relatively fast,'' said Mark Waggoner, president at Excel Futures Inc.

Brent December crude was down 54 cents at $108.90 a barrel, having swung from $108.70 to $110.10.

Brent's slip reduced its premium to U.S. crude pulling it below $23 a barrel intraday on Tuesday, after it had pushed above $24 a barrel.

ASSESSING DAMAGE TO OIL FACILITIES

The biggest refinery in the eastern United States, which is in Philadelphia, and several others were ramping up operations after escaping damage from Sandy.

But the region's second-largest refinery suffered ``some'' flooding and a power outage, according to Phillips 66, while two smaller refineries also lost power, helping limit fuel futures price losses.

Phillips 66 said there was ``some flooding in low-lying areas'' of its 238,000-barrels-per-day Bayway, New Jersey refinery, which was shut on Monday as a precaution.

The plant remains closed and utility PSE&G said on Tuesday power was likely to be restored only in 24 to 48 hours.

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

OIL INVENTORIES

The American Petroleum Institute plans to release its weekly report on U.S. oil inventories on Tuesday at the normal scheduled time of 4:30 p.m. (2030 GMT).

But the U.S. Energy Department said it was delaying the Energy Information Administration's weekly oil inventory report at least until Thursday, depending on the extent of the storm damage.

U.S. crude inventories were expected to have increased by 1.5 million barrels in the week to Oct. 26, according to a preliminary Reuters survey of analysts taken on Monday.

(Additional reporting by Alice Baghdjian in London and Florence Tan in Singapore; editing by Carol Bishopric)