Indian rupee up in early trade on currency arbitrage

MUMBAI, May 9 (Reuters) - The Indian rupee moved away from one-year lows on Friday, as banks cashed in on differentials between the local and overseas rates, but record oil prices kept sentiment wary about possible widening of trade deficit.

* At 9:15 a.m. (0345 GMT), the partially convertible rupee <INR=IN> was at 41.715/725 per dollar, off an intraday high of 41.66. The rupee closed at 41.76/77 on Thursday.

* Traders said a few banks bought rupees cheaper locally to arbitrage in the overseas non-deliverable forward (NDF) <PNF=> market. * Oil CLc1, India's biggest import, hit a record high above $124 a barrel on Thursday.India imports 70 percent of its oil needs, and crude refiners are among the biggest Indian buyers of dollars. (Reporting by Anurag Joshi; Editing by Prem Udayabhanu)