Russian gas reached Europe through Ukraine for the first time in a fortnight today, pushing down the price of oil.

Energy giant Gazprom turned on the taps again after Moscow and Kiev agreed a new contract, raising hopes of an end to the disruption.

A price dispute between the two nations caused supplies to about 20 European countries to be halted two weeks ago.

Gazprom's move sent the cost of Brent crude in London down 34 cents to $44.16 a barrel, as oil products will no longer be needed to replace the cut-off gas.

The crude price was also hit by the gloomy economic outlook as traders bet there would be a further drop in demand.

Slovakia, which neighbours Ukraine, reported that gas is now arriving through the pipelines, although Kiev said it could take one-and-a-half days before supplies get to other European countries.

Under its new contract, Ukraine will have to fork out $360 per 1000 cubic metres of gas during the first three months of this year, a sharp rise on the $179.50 it paid last year.