INDIA RUPEE-Rupee seen resuming decline on oil prices, U.S. inflation concerns

MUMBAI, Oct 3 (Reuters) - The Indian rupee is tipped to open weaker against the U.S. currency on Monday, as oil prices rose following a report that OPEC+ will consider cutting output at a meeting this week.

The rupee is expected at around 81.50-81.55 per U.S. dollar in early trades, down from 81.34 in the previous session.

The rupee on Friday gained the most in a month following a Reuters report that the Reserve Bank of was encouraging state-run refiners to reduce dollar buying in the spot and instead use a special credit line.

The “bump up in oil prices” and the persistently weak risk appetite will “snuff out the slight bit of momentum that we saw for the rupee on Friday”, a trader at a Mumbai-based bank said.

The last week’s range of 81.15-81.95 per dollar “can be taken as the new trading range” with risks “clearly on the side of 82 being taken out”.

The Brent crude December contract climbed 3% to $87.66 in Asia trading, recovering from the near 10% slide last month that was fuelled by concerns over demand, as fears of a slowing global economy grew.

To support prices, the Organization of the Petroleum Exporting Countries and their allies, a group known as OPEC+, are considering an output cut of 0.5 million to 1 million bpd ahead of Wednesday’s meeting, OPEC+ sources told Reuters.

Meanwhile, Asian shares were mostly lower after the S&P 500 Index fell Friday to round its worst monthly performance since March 2020. Rising U.S. recession risks, as the Federal Reserve hikes rates aggressively to control inflation, is weighing on demand for global equities.

The data out on Friday compounded worries over inflation. A reading of core U.S. inflation rose more than expected, suggesting little let up from the Fed on the pace of rate hikes. KEY INDICATORS: ** One-month non-deliverable rupee forward at 81.81; onshore one-month forward premium at 24.63 paise ** USD/INR NSE Sept futures closed on Friday at 81.71 ** USD/INR forward premium as of Sep. 30 for end current month is 21.5 paise ** Dollar index down at 112.02 ** Brent crude futures up 3.1% at $87.8 per barrel ** Ten-year U.S. note yield at 3.79%, India 10-yr bond yield at 7.43% ** SGX Nifty nearest-month futures down 0.9% at 16,929 ** As per NSDL data, foreign investors sold a net $473.2 mln worth of Indian shares on Sep. 29 ** NSDL data shows foreign investors sold a net $97.5 mln worth of Indian bonds on Sep. 29 (Reporting by Nimesh Vora and Anushka Trivedi; Editing by Neha Arora)