The market works, even for oil. Through most of the 80s, oil companies were mostly high and dry, and nobody cared back then.

Oil company profits are huge because the amount of money that flows through the company is huge, but it's within the same percentage range as many other businesses, and don't go up as a percentage much when producer prices do.

I don't know what people would consider a "reasonable" profit, but in 2006, Exxon-Mobil made a profit of about $40 billion on revenues of $378 billion, which is about 11 percent. Keep in mind that Exxon has to pay the producers, too.

We're not going to get all the way back to the old prices. There are real demand issues involving China and even more nutball-nation producer issues. But barring some major crisis I wouldn't be surprised to see prices per barrel a lot lower in a few months.