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* Lack of power shuts many major fuel terminals
* NY Harbor closed to tankers, some waterways shut
* Logistics complicate delivery under NYMEX contracts
By Robert Campbell
NEW YORK, Nov 1 (Reuters) - Logistical problems caused by power failures and navigational hazards from storm Sandy continued to roil New York Harbor on Thursday, threatening widespread delays in fuel deliveries off the New York Mercantile Exchange's futures contracts.
With many New York and New Jersey gasoline stations running dry or without power, oil companies are scrambling to resupply their networks but cannot gain access to millions of barrels of fuel trapped in the region's terminals. A diesel fuel spill after the storm added to the woes, keeping a key waterway shut.
Most, if not all, of the terminals approved by the NYMEX futures exchange as delivery points for its gasoline and heating oil contracts were closed, raising the possibility that traders would be unable to fulfill contractual deliveries immediately under the November futures contract, which expired on Wednesday.
Large oil tankers were also still barred from freely entering New York Harbor, a major point of entry for the nearly 1 million barrels per day of fuel imported to the East Coast of the United States.
The U.S. Coast Guard allowed limited movements on Thursday by barges and other small vessels in the harbor, which straddles the states of New York and New Jersey. Tankers are also being permitted to berth on a case-by-case basis, but several key waterways remained closed.
Most of the region's refineries continued to restore operations, with oil markets focused on the recovery of Phillips 66's 238,000-bpd Bayway plant in Linden, New Jersey. The refinery could resume operations next week at the earliest as it deals with electrical equipment damaged by flooding and boosts power supplies.
The U.S. East Coast relies on shipments of fuel from the Gulf Coast and from overseas refineries to meet more than a third of regional oil demand.
Navigational hazards forced the closure of three channels in the lower part of the harbor, including the heavily used Arthur Kill, a tank farm-lined waterway separating New York's Staten Island and New Jersey, the U.S. Department of Energy said.
The Coast Guard had no timetable for reopening Arthur Kill, hit by debris and a diesel spill.
Terminal operators that are approved delivery points for NYMEX gasoline and heating oil futures contracts, including Motiva, NuStar and Kinder Morgan, remained shut because of power shortages or damage, making them unable to schedule deliveries or shipments.
"We're down, we've got no power. There's no electricity in the entire city of Bayonne and we've got no idea when we'll get back up," said an operator at the International Matex Tank Terminal in Bayonne, New Jersey.
Traders who did not exit their November RBOB gasoline or heating oil futures positions before expiry on Wednesday must begin on Nov. 1 to make arrangements to deliver or receive fuel. Gasoline futures fluctuated wildly on Wednesday as dealers positioned, surging more than 7 percent before fading.
Deliveries must be completed between Nov 8. and Nov. 29, according to the regulations of the CME Group, operator of the NYMEX.
However, with little or no terminal capacity available, counterparties may have no choice but to declare force majeure under the provisions of the CME's regulations and then arrange alternative delivery times, traders say.
"The flexibility of the dates and methods for delivery should help keep delivery on the November contract from becoming an issue," said a products broker who requested anonymity because of customers who are buyers and sellers on the exchange.
A CME spokesman said the group was working closely with customers, market participants and terminals in New York Harbor as they assess the storm's impact on their operations.
"We continue to monitor the situation and will keep market participants updated as information becomes available," the spokesman said.
There are 13 approved terminals in New York and New Jersey for the delivery of RBOB gasoline and 16 terminals where heating oil deliveries can be made.
The U.S. Energy Information Administration said on Thursday that only four terminals in New York, New Jersey and Connecticut were open. None was in the harbor, three were in Connecticut and one was in Paulsboro, New Jersey.
Local distributors were believed to be active in the market, taking positions to ensure they would receive supplies.
"Due to the refining, port and pipeline issues in the aftermath of Sandy, 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.
Colonial Pipeline, operator of a major artery that moves fuel from refineries on the U.S. Gulf Coast to the northeastern United States, said it hoped to resume limited operations on Friday but that deliveries into the New York Harbor area would be complicated by storm damage.