Global oil prices up on output cuts

Global oil prices have increased after several of the world’s largest exporters announced on Sunday surprise cuts in production starting May, a move that is likely to strain countries where high fuel prices are a heavy burden.

On Monday, Brent crude oil was trading above $84 a barrel after jumping by more than 5 percent while US benchmark crude oil rose 5.6 percent to $79.91 per barrel in electronic trading on the New York Mercantile Exchange.

Saudi Arabia, Iraq, and several Gulf states said on Sunday they were cutting output by more than 1.5 million barrels of oil a day while Russia announced it will extend its cut of 500,000 barrels per day until December this year.

Kenya will from April start importing fuel on credit of up to one year from the United Arab Emirates and Saudi Arabia to ease pressure on dollar demand a move that does not offer clarity on whether motorists could benefit from cheaper pump prices.

Pump prices in Kenya have remained high since November last year with petrol currently retailing at Kes179 per litre, diesel Kes162 and kerosene Kes145.94.