Reply #80: Of course it is. [View All]

[Statistical]

An iphone has a 80% gross profit margin. Demand supports that price.

You may think $40 profit in oil is "too expensive" but to a newly started agricultural co-op in china $200 oil is cheap. Dirty cheap. The amount of productivity gain they can get from even $200 oil is off the charts.

The amount of profit margin doesn't determine a price. The amount of aggregate demand relative to supply does. Supply isn't going up by any material amount and will eventually decline. Demand is only going to increase. There are huge portions of the world without mechanized labor. They can see a significant gain in productivity and prosperity by using oil (oil driven machinery) even at $200 a barrel.