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NYMEX-Oil falls below $86 as refineries brace for Hurricane Sandy

SINGAPORE, Oct 29 (Reuters) - U.S. crude futures slipped below $86 a barrel on Monday as refineries along the East Coast lowered run rates ahead of approaching Hurricane Sandy, reducing crude use in the world's largest oil consumer.

FUNDAMENTALS

* U.S. crude for December delivery fell 43 cents to $85.85 a barrel by 2316 GMT. Brent crude for December was at $109.10, down 45 cents.

* Oil refineries along the U.S. Atlantic Seaboard, having put their storm preparedness plans in place, began to cut rates on Sunday ahead of Hurricane Sandy's expected landfall along New Jersey's barrier islands spurred by fears of power outages. Six East Coast oil refineries representing 1.19 million barrels per day -- or 7 percent of total U.S. capacity -- could potentially be hit by the deadly storm.

* The CME said it will suspend floor trading on Monday at its NYMEX world headquarters because of mandatory evacuation by the city of New York ahead of Hurricane Sandy but the move is unlikely to affect trade as higher-volume electronic dealing will operate normally.

* The world's spare oil production capacity outside of Iran rose in last two months as gasoline demand waned in the United States and oil use for power generation fell in the Middle East, the U.S. government said in a bimonthly report.

* Speculators cut their net long U.S. crude oil futures and options positions to the lowest level in three months in the week to Oct. 23 as prices fell by almost 6 percent, the U.S. Commodity Futures Trading Commission said.

* Bad weather has slashed Iraq's southern oil exports to 792,000 barrels per day (bpd) from 2.35 million bpd, a disruption that could last at least one day, Iraqi oil sources said. But exports of Iraqi Basra Light are set to hit their highest level ever at 2.531 million barrels per day in November, traders said and preliminary programme showed.

* Nigerian oil exports in December are expected reach the highest level since May, pointing to a swift recovery of production after floods knocked out a fifth of the output in the top African producer.

* Norwegian oil and gas group Statoil ASA cut its 2013 production target and saw some risks to this year as well before production rises again from 2014.

* Oil major Royal Dutch Shell is seeking to work around international sanctions by repaying a $1.4 billion oil debt to Iran with a grain barter deal via U.S. agribusiness giant Cargill, industry sources said.

MARKETS NEWS

* Shares on major markets ended little changed on Friday as weak corporate earnings offset better U.S. economic data, though investors remained concerned about slowing global growth.

* U.S. stocks finished flat on Friday, recovering from moderate declines as bargain hunters rushed in to buy Apple, lifting it off its lows, and scooped up other stocks recently battered by disappointing results.

* The yen got off to a steady start on Monday, having rallied late last week as markets cut bearish positions amid talk the Bank of Japan might not ease as much as expected at its looming policy meeting.

DATA/EVENTS

* The following data is expected on Monday:

- 1230 GMT U.S. September Personal income

- 2350 GMT Japan September preliminary industrial output

(Reporting by Florence Tan; Editing by Ed Davies)