U.S. Frackers Trying To Survive Oil Market Volatility; Iran To Ramp Up Oil Production If Deal Signed.
BARNETT: Crude oil hasn't been immune to the recent market volatility. Prices plunged more than 7 percent at one point on Tuesday.</s>CHURCH: As oil prices fall so do the profits of U.S. frackers, but as Richard Quest reports some are managing to prosper.</s>RICHARD QUEST, CNN BUSINESS CORRESPONDENT (voice-over): They knew it was just a matter of time.</s>UNIDENTIFIED MALE: The thing goes to the well head and down the casings.</s>QUEST: Two years ago the oil men of West Texas were riding high. Oil was over $100 a barrel.</s>UNIDENTIFIED MALE: It's gold. It's liquid gold.</s>QUEST: They didn't gloat. They knew very well the history of oil. (on camera): You don't believe it's here to last?</s>UNIDENTIFIED MALE: No, sir. It's not here to last. I've been through two of the busts. Comes and goes. It's part of it.</s>QUEST (voice-over): That was the boom then came the bust. On the floor of the NYMEX where they place bets on the future price of crude, traders have been rocked by huge price swings.</s>UNIDENTIFIED MALE: It's been tough. The market is unforgiving here.</s>QUEST: The problem is there's oil everywhere. The frackers keep pumping. Production's only fallen slightly from near record levels and Saudi Arabia is priming the pumps. The story of the past few weeks, volatility, oil bounced back in the last days of August and the Frackers are still in a tough spot.</s>JAMIE WEBSTER, IHS ENERGY ANALYST: The firming up that we've seen in the prices doesn't change the fundamental fact that you are still in an oversupplied situation. We've got far too much supply for too little demand.</s>QUEST: The frackers who resisted pressure to cut may be forced to do so soon. The bankers are running out of patience.</s>WEBSTER: October is a point where the banks will relook at how much they want to be giving out in loans. The amount of capital that these companies can get ahold of may start to be pinched off.</s>QUEST: Investors are already running scared. Energy stocks have been volatile. Bonds issued by energy producers are losing billions of value. Oil and gas firms Quicksilver Sources and Endeavor International have filed for bankruptcy and more may fail.</s>UNIDENTIFIED MALE: At some point, you see more merger or bankruptcy and then acquisition.</s>QUEST: From West Texas to the badlands of North Dakota, the new age of oil barons relished the battles with OPEC and insists they will survive.</s>UNIDENTIFIED MALE: The Saudis and OPEC haven't killed American oil or shale. They have made it faster, stronger, better and more ready to compete with them going forward.</s>QUEST: Oil enjoyed its biggest rally in decades over the past week. Still the U.S. energy landscape could look very difficult very soon. Richard Quest, CNN, New York.</s>CHURCH: And despite a price-killing surplus in the world oil market, Iran is planning a comeback in petroleum. CNN's John Defterios spoke exclusively to Iran's oil minister who says Tehran wants to start exporting oil as soon as sanctions allow it.</s>BIJAN NAMDAR ZANGENEH, IRANIAN PETROLEUM MINISTER: After one year the reaction of the market on shale oil producers means and shows us that it has no important effect. And I think we are going to the point, as I said, to decide how to manage the market.</s>JOHN DEFTERIOS, CNN CORRESPONDENT: Some are suggesting that Iran is planning to come by the end of March with 1 million barrels a day. That takes the oversupply to a 17-year high and pointing the finger at Iran as spoiling the market even worse than we've seen over the last 12 months.</s>ZANGENEH: Can we wait and not produce after lifting the sanction? Who can accept it in Iran? Do you believe that the nation of our country will accept it? Not to produce for secure the market for others? The first oil producer in the Middle East, can we lose our share in the market? It's not fair?</s>DEFTERIOS: By 2020, the combined production of Iran and Iraq will be about level with Saudi Arabia. This will change the dynamics within OPEC and the OPEC leadership. How will it change do you think?</s>ZANGENEH: We, with all difficulty that we had, it's the history of OPEC that we should cooperate with each other and to go ahead with each other. It's very, very important. We should cooperate with each other. It's the organization. It's the signal to the market that we want to be with each other.</s>DEFTERIOS: You are producing 2.8 million barrels a day right now. Your pre-sanctions peak was 2.4 million barrels a day. How will it take to get up to 4.3, 4.2 million barrels?</s>ZANGENEH: We are trying around the end of the next year we will be close to these figures.</s>DEFTERIOS: By the end of 2016?</s>ZANGENEH: Yes.</s>DEFTERIOS: Most people don't think you can add more than 600,000 barrels a day. Six sources said you will be lucky to add 600,000 barrels.</s>ZANGENEH: They should wait.</s>DEFTERIOS: You can get to 4.2 by the end of 2016?</s>ZANGENEH: I wish.</s>DEFTERIOS: German, French, Italian, British delegation is there space for the Americans to come in? It seems like the Europeans are rushing to get to Iran to get a head start on the Americans.</s>ZANGENEH: I hope U.S. administration not to put sanction against them to come to Iraq and from the Iranian side we have no objection or difficulty. We are open for receipt and they will come if they want to come. And only U.S. companies lose in that market. Now I hope they don't lose in this new stage of development of Iranian oil projects.</s>DEFTERIOS: You share the largest gas field in the world with Qatar. Most of the territory is Qatari. Will it create a problem because Qatar doesn't want to increase production? It wants to last 100 years. Is it a political problem?</s>ZANGENEH: No. We have no political -- no dispute with Qatar. And Qatar has reached to the highest level of production that they can for -- from many years ago. And we should accelerate our activities to reach to the level that Qatar has produced before.</s>BARNETT: That was John Defterios with the Iranian oil minister there. Now after a brief taste of autumn last week parts of the U.S. are dealing with the hottest start to September in decades. Our meteorologist, Pedram Javaheri, join us with more. Explain these crazy swings and fluctuations.</s>PEDRAM JAVAHERI, AMS METEOROLOGIST: This is something last week we were touching on nice conditions and everyone wants to tie everything to climate change. If this happens consistently as it has been when you look back in ten years you can say between 2010, 2020 you saw it happening more than the previous decade before that. But we want to show you what is happening, the warmest September since 1985 for Chicago so pretty impressive set up. We have the autumn like temps and the summer like temps returning for some places. It's incredible to think about what it is like right now. Chicago, Illinois, 3:45 in the morning Eastern Time. Chicago is it 76 degrees Fahrenheit. That is equivalent to the beaches of the panhandle of Florida, a muggy and warm air mass in place. But a week ago, the temperatures were far cooler. In fact, the high temperature was 67 degrees on Wednesday and warming to the 80s. And Chicago has hit 92 three times this summer. And they could support another one, but Atlanta was the coolest since May. And I want to show you Atlanta and Sydney. They are at similar latitudes one in the north and one in the south. September is the initiation the meteorological autumn or fall. In Atlanta you see a dramatic cooling trend from the mid-80s to the upper 70s you expect. While in Australia is the spring beginning. So the temperatures go from the 60s Fahrenheit up to 70s as the days become longer, a changing pattern of the seasons. But for parts of the U.S., the change is not here to stay as the heat continues for the next couple weeks.</s>BARNETT: Next couple of weeks -- OK, don't know what to expect these days.</s>CHURCH: I don't mind.</s>JAVAHERI: See how long it keeps going.</s>CHURCH: I'm happy to have the heat. And straight ahead, a fish tale you will have to see to believe. One man is changing the sport by catching fish from the air. We'll explain when we come back.