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Last Updated: Wednesday, 4 January 2006, 13:24 GMT
Energy prices ease after gas deal
Ukrainian gas worker
Russia says gas supplies to Europe have now been fully restored
Global energy prices have eased after Russian and Ukrainian officials ended their dispute over natural gas.

The row, which saw Russia cut gas supplies to Ukraine, had led to supply disruption in Western Europe.

Following the news of agreement between Moscow and Kiev, global oil prices dipped as much as 90 cents a barrel and gas prices are expected to follow suit.

Russian gas monopoly Gazprom said the deal with Ukraine would ensure stable pan-European gas supplies.

Under the deal, it appears that Russian gas will be mixed with cheaper supplies from Central Asia. Ukraine will then buy the gas at a price of $95 for 1,000 cubic metres.

Knock-on effect

Russia had switched off the gas supply to Ukraine after Kiev refused to accept a fourfold hike in the price from $50.

This led to a knock-on effect in Western Europe, which receives much of its gas from Russia, via a pipeline that crosses Ukrainian territory.

In Wednesday afternoon trading in Europe, a barrel of London's Brent crude oil was down 90 cents to $60.45 a barrel, while US light crude had fallen 79 cents to $62.35 a barrel.

On Tuesday, global oil prices had closed up more than $2 a barrel as a result of the Russian-Ukrainian dispute.

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