* RBOB gasoline, heating oil futures up as refineries shut
* Winds, storm surge buffet U.S. East Coast
* Colonial Pipeline preparing for possible closure
(Recasts with updated settlement prices)
NEW YORK, Oct 29 (Reuters) - U.S. gasoline futures rallied while benchmark crude oil prices dipped on Monday as Hurricane Sandy slowed East Coast fuel deliveries to a crawl, with major refineries shut, pipelines idle and ports closed.
Nearly 70 percent of the region's refining capacity was on track to be idled, including the Phillips 66 238,000-barrel per day Bayway refinery in New Jersey, as operators braced for possible damage from abrupt power outages or flooding.
The Colonial Pipeline that supplies as much as 15 percent of the region's fuel was also preparing for a possible closure, raising the threat of a near-term squeeze on supplies.
``Demand is going to be negated with the refineries not running and people are hunkering down all over the region, not driving,'' said Mark Waggoner, president at Excel Futures Inc.
November gasoline futures, which expire on Wednesday, rose 5.77 cents to settle at $2.7568 a gallon. Monday's $2.8115 session high was the highest price since Oct. 17.
Longer-dated gasoline prices dipped, however, as traders factored in the reduced demand for fuel with the almost total shut-down of eastern seaboard roads and airports.
``The saving grace is that the roads resemble ghost towns, so there is going to be little demand for gasoline over the next several days, saving us from an extreme upward price spike,'' said John Kilduff, partner at Again Capital LLC in New York.
U.S. November heating oil gained 1.74 cents to settle at $3.1152 a gallon, reaching its highest level relative to U.S. crude oil on record.
The crack spread, the difference in value between a barrel heating oil and a barrel of crude oil, touched $45.15 a barrel on Monday.
Fifty million people from the U.S. Mid-Atlantic to Canada were in the path of Hurricane Sandy. Forecasting services expected the storm to strike the New Jersey shore near Atlantic City on Monday night.
CRUDE FUTURES PRESSURED
U.S. crude futures pushed lower as ample domestic crude supply and the sharp reduction in crude oil needed by refineries shut by the hurricane weighed on prices.
Brent December crude dipped 11 cents to settle at $109.44 a barrel, having reached $110.26. Brent was on pace to post a more than 2 percent loss for the month, a second straight monthly loss.
U.S. December crude fell 74 cents to settle at $85.54 a barrel. Monday's $84.66 intraday low was the lowest price since July.
U.S. crude futures were on track to end October down more than 7 percent, after sliding more than 4 percent in September.
Ahead of weekly oil inventory reports, U.S. crude stocks were expected to have risen last week, according to a Reuters survey of analysts on Monday.
Distillate stockpiles were expected to have fallen, while gasoline inventories edged up slightly, the survey showed.
(Additional reporting by Christopher Johnson and Alice Baghdjian in London and Florence Tan in Singapore; Editing by Marguerita Choy)