Med Crude-Urals stronger in Baltic on arbitrage

* Med also perceived stronger

* Azeri Nov exports to rise, Iraq cuts OSP for Europe

* Rosneft's CEO Sechin meets Gunvor co-owners

LONDON, Oct 9 (Reuters) - Russian Urals crude strengthenedin the Baltic on Tuesday as traders said the grade was supportedby arbitrage deliveries to the Mediterranean, where pricesrallied last week.

In the Platts window, BP bid in the Baltic for an Oct 22-26Urals cargo at dated Brent minus $1.30 a barrel, some 30 centsstronger than on Monday, and Exxon bid for an Oct 20-24 cargo atdated Brent minus $1.35, traders said. They found no sellers.

Last week, Urals rose to its highest levels in theMediterranean since early September as traders said most of theOctober loading programme was cleared out.

On Tuesday, one trader said Urals prices in theMediterranean had probably strengthened further from dated Brentminus 80 cents.

"But it is difficult to peg exact levels as there are so fewcargoes remaining if any," he added.

Traders expect the Baltic to catch up with the Mediterraneanthanks to arbitrage shipments of Urals from Europe's north tothe south including by companies Eni and Repsol.

"The north-south arb is currently wide open," one traderwith a major said.

Talk also persists of potential large shipments to Chinafrom the Mediterranean.

"If another three cargoes leave the region it would make itcompletely empty," one trader with a major said, referring to apotential shipment of a large carrier (VLCC) to Asia, whichamounts to three cargoes of regular size.

Also supporting Urals is continuing purchases by Poland andGermany of Urals from Russian sea ports after the countryreleased lower than expected exports schedule for the Druzhbapipeline toward those countries for October.

"We are seeing seven cargoes (bought by Poland and Germanyfrom the sea) in the first 12-14 days of October," the traderwith a major said.

Trading sources also said oil producer Bashneft will loadone additional cargo of Urals from the Baltic port of Ust-Lugaduring Oct 28-29.

The cargo did not feature in the initial loading scheduleand traders said it will be most likely sold to Poland by traderSoyuz Petroleum, which is marketing Bashneft's barrels.

Russia's top crude producer Rosneft

said onTuesday its powerful chief executive Igor Sechin met theco-owners of international oil trading house Gunvor to discusstrading issues, amid reports of a rift between Sechin andGunvor's co-owner Gennady Timchenko.

Gunvor failed to win volumes at the latest tender by Rosneftin September and as a result the Russian oil trade is now beingdominated by trading houses Vitol and Glencore.

Iraq's oil exports are expected to rise to their highest indecades this month and production is on course to more thandouble by 2020, as it cements its place as OPEC's second-biggestproducer after Saudi Arabia.

Iraq's state oil marketer Somo raised its November officialselling price on Basra Light to Asia on Tuesday, but droppedlevels on Basra Light and Kirkuk to Europe and the Americas, themarketer said.

Exports of Azerbaijan's main crude oil stream, Azeri Light,are set to rise to 20.3 million barrels in November, a loadingprogramme showed on Tuesday.

Exports are back to normal, said a trader, after dropping tonearly a one year low in October at 17.8 mln barrels.

One major Azeri trader said he had heard that one cargochanged hands at prices below dated Brent plus $2 per barrel,which would be 30 cents or more cheaper than previous priceestimates. The levels could not be confirmed.

(Reporting by Dmitry Zhdannikov and Gleb Gorodyankin; editingby James Jukwey)

((dmitri.zhdannikov@thomsonreuters.com)(+44 207 542 38 13))

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