Natural gas prices sink after blistering rally as Vladimir Putin hints at supply surge

• Russian President Vladimir Putin said he was ready to stabilize energy prices by increasing gas shipments to Europe.
• Natural gas prices soared earlier on Wednesday before dramatically tumbling following Putin's statement.
• He also said it was a mistake for Europe to transition to the spot market.

The price of natural gas pulled back sharply on Wednesday after Russian President Vladimir Putin said he was ready to stabilize energy prices by increasing gas shipments to Europe.

The Russian leader said state-controlled giant Gazprom would send more gas than it's contracted to this year, according to Bloomberg. Exports to Europe may even hit a record high for the year, he added.

U.K. futures plunged more than 7% after soaring 28% earlier. In the US, natural gas prices sank 9% to $5.72 per billion BTUs. The retreat comes after prices have more than doubled so far this year amid a global energy crunch.

On September 21, the International Energy Agency, the world's energy watchdog, said Russia could "do more to increase gas availability to Europe" ahead of the cold winter, adding this could be the country's chance to boost its credentials as a reliable supplier to the region.

Putin also said it was a mistake for Europe to transition to the spot market - which has seen record highs lately - instead of phasing out long-term deals in the natural gas trade, Reuters reported.

"The practice of our European partners has confirmed it once more that they made mistakes," he said in a televised government meeting with the country's energy officials. "It was aimed at transition to spot gas trade."

Gazprom, for its part, has always preferred long-term deals with European counterparts that last around 25 years instead of spot trading, Reuters reported.