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UPDATE 6-Gasoline surges 5 pct on supply woes, expiry; oil up

Wednesday, 31 Oct 2012 | 4:02 PM ET

* E Coast fuel supplies seen tight; crude up more modestly

* Phillips: Power restored to Linden, NJ refinery

* Phillips gives no restart estimate

* Heating oil futures flat

(Updates prices, status of Linden, NJ refinery)

NEW YORK, Oct 31 (Reuters) - U.S gasoline futures surged 5 percent on Wednesday as the market braced for potentially long-term fuel supply disruptions at the East Coast's second-biggest refinery following Sandy, the massive storm that devastated the Jersey shore.

Front-month November gasoline futures hit their highest level since Oct. 12 as traders scrambled to cover positions ahead of the contract's expiry later Wednesday, while oil prices saw only modest gains.

The market was focused on tightening East Coast fuel supplies due to concerns the 238,000 barrel-per-day Phillips 66 Linden, New Jersey, refinery could face a long-term shutdown after Sandy cut off power to the plant and flooded some low-lying areas. The company said on Wednesday that power had been restored to the plant but had no estimate for when it would restart.

Other large refineries in the region were restoring operations, leaving traders to balance the expected drop in demand in the giant Northeast fuel market as travel collapsed due to the storm against already tight regional inventories and supply disruptions.

``I think you see a lot of funds hedging themselves and speculation there could be a lot of damage'' from Sandy, said Richard Ilczyszyn, chief market strategist and founder of iitrader.com LLC in Chicago.

U.S. RBOB gasoline futures traded up 4.9 percent to $2.8625 per gallon at 11:48 a.m. EDT (1548 GMT). Brent crude oil rose 30 cents to trade at $109.38 a barrel, while U.S. crude traded up $1.10 to $86.78 a barrel.

Heating oil futures were off slightly at $3.081 per gallon.

(Reporting by Matthew Robinson in New York, Alice Baghdjian in London, Florence Tan in Singapore; editing by Jim Marshall and David Gregorio)