UPDATE 8-Gasoline up on U.S. Northeast supply worry, crude mixed

* U.S. November gasoline, heating oil contracts expire

* Phillips 66: Power back at Bayway refinery in Linden, New Jersey

* Phillips 66 gives no restart estimate for New Jersey refinery

(Recasts with settlement prices, updated market activity)

NEW YORK, Oct 31 (Reuters) - U.S. gasoline futures prices rose on Wednesday on concerns about East Coast supply shortages as the energy sector struggled to restore operations disrupted by massive storm Sandy.

Expiring front-month November gasoline futures pared gains late after surging more than 7 percent during the session, hitting their highest level since Oct. 12.

Gasoline futures attracted wholesale buyers trying to lock in physical supplies, market sources said.

Even as the aftermath of the devastating storm kept many motorists off the road, more than half of the gasoline service stations in the New York and New Jersey area were shut due to a combination of power outages and depleted supplies.

While operators continued to restore refineries and pipelines after disruptions crippled the East Coast fuel supply network, the focus remained on Phillips 66's 238,000 barrel-per-day Bayway refinery in Linden, New Jersey.

Power cut off by the storm was restored, the company said, but sources said it might be next week before the refinery restarts.

``Some wholesalers may be using the expiring NYMEX gasoline contract as a way to get physical supply over the next several weeks,'' said John Kilduff, partner at Again Capital LLC in New York.

``There are growing concerns about shortages of gasoline at the retail level and the tight gasoline supply situation in the New York Harbor even before the storm.''

Gasoline inventories in the mid-Atlantic region were already 16 percent below last year's levels before the storm hit, according to U.S. government data.

November RBOB gasoline futures rose 3.30 cents to settle and go off the board at $2.7618 a gallon, off an earlier high of $2.9375. The more-actively traded December contract rose 1.48 cents to settle at $2.6303 a gallon.

Expiring November heating oil, the U.S. benchmark distillate contract, fell 1.84 cents to settle at $3.0682 a gallon.

The U.S. Environmental Protection Agency on Wednesday granted New Jersey a temporary waiver on Ultra Low Sulfur Diesel (ULSD) specification requirements to help counter a shortfall in fuel supplies in parts of the state.


While crude futures were mixed, Brent and U.S. benchmark crude posted losses for October, the second consecutive monthly declines.

Before the calamity of storm Sandy, tepid demand, slowing global economic growth and expectations of returning North Sea supply - following maintenance-related production curbs - had weighed on crude prices.

On Wednesday, Brent December crude oil fell 38 cents to settle at $108.70 per barrel, having swung from $108.31 to $109.80. For the month, Brent fell 3.2 percent.

U.S December crude rose 56 cents to settle at $86.24 a barrel, but stumbled 6.5 percent in October.

Traders awaited a fresh snapshot of U.S. oil inventories for the week to Oct. 26 from U.S. Energy Information Administration data. The report was delayed a day because of the storm and is set to arrive on Thursday at 11 a.m. EDT (1500 GMT).

A report from the American Petroleum Institute released on Tuesday showed small gains in gasoline and oil stockpiles for the week, while distillate stocks showed a nearly 900,000-barrel drawdown.

(Additional reporting by Alice Baghdjian in London and Florence Tan in Singapore; Editing by Jim Marshall, David Gregorio and Dale Hudson)