The author of Less Than a Shoe String, a great budget travel blog, forwarded me an open letter from American airline CEOs. The letter described here basically points to speculation in the oil futures market as the cause of the sharp increase in oil prices over the last year or so. It urges everyone to contact their congressperson to stop oil futures trading to save the airline industry
I’m speculating here, but at the same time oil prices have been increasing the value of dollar compared to other currencies has been decreasing. As currencies depreciate (lose value) imports become more expensive.
If $1 is worth half of what it used to be, we can buy half as much oil.
Econobrowser, graphs oil prices in both US $ and Euros. I have included his graph below. You can see oil prices in Euros have increased but not as much as in $s.
So although speculation may be part of it (my guess is a small part), the really big force seems to be the weak US dollar.