Indian rupee may drop as oil hits new peak

MUMBAI, May 22 (Reuters) - The Indian rupee <INR=IN> could fall to fresh 13-month lows past 43 per dollar on Thursday on worries record oil prices will widen the trade deficit and add to inflationary pressures.

* Oil rose to a fresh record high above $135 per barrel on Thursday. [O/R]. India imports about 70 percent of its oil and refiners are the biggest buyers of dollars. Analysts said the rupee may have to adjust lower to reflect a widening trade gap.

* The partially convertible rupee ended at 42.83/84 per dollar on Wednesday, off an intraday low of 42.90, and 0.45 percent weaker than Tuesday's close of 42.635/640. It hit 42.92 last Friday, its weakest since mid-April 2007.

* Asian share markets slid for the third straight day on Thursday after the U.S. Federal Reserve slashed the U.S. economic growth forecast and oil surged above $135 a barrel, rekindling fears of stagflation. See [ID:nSP121036]. (Reporting by Saikat Chatterjee; Editing by John Mair)