Now with oil bubble deflated, 60 Minutes yesterday had a nice review of how we got there. The conclusion is that it was largely driven by speculations and deregulation.
Like any other bubbles, this oil bubble had a nice attractive story/theme: demand from China and India. But what eventually drove oil price to $147 peak was not supply-demand equation, but human's greed. Investment banks and deregulation just facilitated it.
When comes to digesting this oil boom and bust, I find it always useful to read Jim Hamilton's paper on understanding oil prices, and of course, you can always review my earlier posts on this topic here and here.