LONDON: Crude oil was little changed on Tuesday as investors awaited news of the damage by Hurricane Sandy, which lashed the US East Coast, closing refineries and denting demand.
US refinery and pipeline companies will begin assessing the storm's damage on Tuesday, hoping their flood defences and on-site power would allow operations to resume swiftly.
But even if the refineries escape unscathed, any damage to the vast network of oil terminals, pipelines and truck racks in the region could complicate supply logistics.
Brent crude for December fell 17 cents to $109.27 a barrel by 0934 GMT. US crude for December was down 1 cent at $85.53.
US gasoline futures fell 0.55 percent to $2.7415 a gallon, after climbing more than 5 cents on Monday on expectations of tighter supply.
"People are just holding back a little bit to see if there's any real damage and impact, and at the moment it's too hard to see," said Bjarne Schieldrop, an analyst at SEB in Oslo.
"It's very clear that it's a very vast energy infrastructure network in that region and it's going to be impacted in some way, in terms of all the logistics to transport oil and oil products," he said.
Brent slipped below $109 earlier in the day but pared losses after the US dollar softened against major currencies in subdued global markets with the closure of New York stock exchanges.
A weaker greenback makes dollar-denominated oil more affordable for holders of other currencies.
STANDSTILL
A weaker demand outlook put pressure on prices as the storm, one of the biggest ever to hit the United States, brought the East Coast to a standstill, shutting air, ship, rail and even highway services and knocking out power to more than 2.8 million homes and businesses.
"People can't go out, they can't use, they can't consume," said Jonathan Barratt, chief executive of Barratt's Bulletin, a Sydney-based commodity research firm. "Crude inventories are running pretty high, 11-12 percent above a five-year average."
"The only area of concern is if the refineries are going to be knocked out for a period of time," Barratt said, but added this would be a rare event given that operators were prepared for the storm.
Fuel supply into the region ground almost to a halt with the closure of two-thirds of the region's refineries, its biggest pipeline and most major ports.
Sandy will close US stock markets for a second day on Tuesday as Wall Street turned its attention to whether markets would be able to resume functioning for the month's final trading day on Wednesday.
The American Petroleum Institute said on Monday it had not yet delayed the release of its weekly petroleum stocks report but would continue to assess conditions.
Analysts, in a preliminary poll by Reuters, expect US crude inventories to rise by 1.5 million barrels for the week ended Oct. 26.
Speculators have cut net long positions in Brent crude oil and gasoil futures and options after three weeks of increases, data from the IntercontinentalExchange (ICE) showed, as an impending restart at Britain's largest oilfield Buzzard also weighed on prices.
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