European gas markets witnessed a drop in wholesale prices on Tuesday, November 9, following the resumption of westward gas flow from Russia to Germany, just a day after a halt in the gas supply to Europe pushed prices soaring.

On Monday, Gazprom, Russia's state-owned gas supply, started pumping more gas to Europe through a pipeline from Yamal in Siberia to Germany. Based on the data shared by German officials, the gas supplier later increased the gas volume to its highest levels in two weeks.

The renewed supply of high-volume gas to Europe has eased the fear of exorbitant gas prices and looming gas shortages as Europe nears the cold winters.
 
With Europe depending on Russia for at least one-third of its gas, Moscow's role in stabilizing gas prices in Europe is very significant. As such, a few days' halts in the gas supply from Russia to Europe could send European gas prices going through the roof.

Gazprom announced on Tuesday it had started pumping natural gas to some five European underground gas storage tanks following President Putin's order to increase gas supply to Europe this month and build inventories in the region once the company is done replenishing the local gas storage tanks.

Although the gas prices slumped in the European Union countries and Britain, market experts say a significant drop in gas prices will depend on Russia doing enough to keep the gas shortage concerns a thing of the past.

According to an analyst at consultancy Energy, Trevor Sikorski, gas prices will remain high until gas shortage concerns are alleviated.

For Gazprom to replenish all the European gas storage tanks, it would need to boost its supply by 170 million cubic meters of gas per day through a month. That would result in about a third increase over the current amount of gas it supplies, Dmitry Marinchenko,  a senior director at Fitch rating agency, told Reuters.

"For such a serious increase in supplies, Gazprom would have to book additional transit capacity via Ukraine – the Nord Stream 1 and Yamal-Europe would not be enough," added Marchenko.

According to Ukrainian gas transmission system officials, Gazprom had requested to ship 100.2 mcm of gas daily via Ukraine. Even though the amount of gas is less than the 110 mcm per day it had paid for, it's more than the 56-64 mcm shipped per day a the beginning of this month (November).