Over the last couple of months, the price per barrel of oil has moved up from the $ 50s to the % 70s and is near $ 80 per barrel. Although no one can predict the daily or weekly ebbs and flows, the general upward trend was the most likely occurence from world events of the past year.
Why? Oil is a worldwide commodity, subject to both the laws of supply and demand and to the many international financial events that we hear every day: government deficits from both operations and stimulus packages (neither unique to the USA) and how they are funded and by whom. The US Government continues to issue government paper to fund the deficits. It carries a very low rate of return for the purchasers, which they are, for now, willing to accept, given their alternatives. A huge amount of US government paper is bought and owned by our trading partners, a lot of it to China.
Our trading partners use the US government paper to buy goods from the US and others. They hold the rest as a form of savings. In order to make US goods more competitive overseas, prices there must be cheaper in dollars.
How does oil play into this? Oil is bought and sold worldwide, from many countries and in many currencies. The US uses more oil than it produces and has for years. The US has to buy oil with those lower-value dollars (it takes more dollars than it used to require).
More dollars needed equals higher prices for the oil (in dollars).
So what's next?
When it takes more dollars to buy goods, that's called inflation. Funding the deficit with low-interest rate money (they call it 'cheap') may make more dollars available, but it doesn't make them more valuable.
So expect significant inflation over the next couple of years, and then expect interest rates to rise in order to fight that. The degree of the shock will depend on how well governments and businesses manage the markets of the world.