* Repeat of shortages in Oct unlikely, demand slowing
* Prices could fall if oil products build at ARA hub
* Freight rates unchanged as trading activity limited
(Changes dateline, recasts, updates)
By Claire Milhench and Jessica Donati
LONDON, Dec 19 High water levels have halted
shipping along part of the Rhine, holding up shipments of
refined oil products into Germany and Switzerland, but weak
demand is likely to prevent shortages that led to sharp rises in
prices for consumers in October.
Although stocks remain low for the time of year,
temperatures are rising, trimming demand for products like
heating oil. This is more likely to put prices under pressure.
"For now, due to the warm weather, I would take it more on
the bearish side than the bullish side," said Olivier Jakob, an
analyst at Petromatrix in Switzerland.
"The weather is warm and some of the product is going to
pile up in Rotterdam, which is a price-making area."
The weather is forecast to remain mild at least until the
end of the month. As a result, the interruption in shipments
along the Rhine could cause prices of gasoline and diesel to
fall because of a build up in inventories in the
Ultimately, however, the extent to which stocks pile up will
depend on how many cargoes from other regions are shipped in and
out of the hub.
"It's difficult to get barges down from ARA again, but so
far we haven't seen any impact (on prices)," said a distillates
The Rhine is an important shipping route for commodities
such as grains, minerals, coal and oil products including
gasoline and heating oil.
River water levels have risen sharply in the past few days
after rising temperatures melted snow, followed by heavy
rainfall. High water levels prevent vessels sailing under
bridges, while barge wakes can burst waterway banks.
On Wednesday, the river was closed to all shipping until
further notice near Karlsruhe in central Germany, a spokesman
for the river police said.
"It becomes too dangerous - the barges create waves," said
Pieter Kulsen, an independent Dutch oil analyst. "It means they
can't go through certain areas because it could create an
overflow and impact the people living alongside."
The Rhine reached 752 cm at Maxau on Wednesday morning, and
must be closed once it breaches 750 cm. Elsewhere, barges were
forced to slow at Kaub WL-KAUB as water levels had risen above
the threshold 460 cm, although they remained below the year's
peak of 712 cm.
A slowdown in trading activity ahead of the Christmas
holidays is another reason the Rhine closure is having a muted
impact on prices.
Traders prefer to keep stocks low at the end of the year for
tax reasons. "With the broken weeks over the Christmas period,
everyone is closing their books for 2012," Kulsen said.
A middle distillates broker said that with the warmer
weather of recent days, no one expected German heating oil
buying to pick up until next year.
German consumer heating oil demand has been limited in
recent weeks, with households preferring to run down tanks
rather than restock at high euro-denominated prices.
This lack of trading activity is reflected in the sideways
move in freight rates despite the higher water levels.
Freight rates for barges heading along the Rhine to Basle
have been little changed since the start of December
FRT-GOBASLE at 18.50 euros per tonne. Data from Kulsen's PJK
International reinforces this picture for gasoline and gasoil
The closure of certain sections and slow steaming in other
parts will hold up shipments along the river and add to loading
delays that have affected ARA in recent weeks.
(Additional reporting by Michael Hogan in Hamburg; editing by
Mark Potter and Keiron Henderson)