Crude oil is almost $140 per barrel.
By now you'd think we would know where it comes from.
No one really knows. The conventional wisdom is that oil descends from algae from eons ago. Lots and lots of algae. Unimaginable mounds of dead algae in quantities no longer found on this planet, pressed, and cooked into hydrocarbon liquids. Thus: fossil fuel. Others, notably the Russians, have an alternative theory that oil comes from non-biological carbon compounds deep in this planet, like the methane oceans we find on other planets. In this scenario oil is a planetary phenomenon. Indeed this abiogenic oil could still be forming in the earth. Thousands of Russian papers supporting this view have still not been translated. The American astrophysicist Thomas Gold also advocated a similar idea (which may or may not have been influenced by the Russians) in his book "The Deep Hot Biosphere : The Myth of Fossil Fuels".
The best overview for this alternative genesis is this recent scientific paper by G.P. Glasby reviewing the Russian/Gold view in light of research as of 2005. It assumes too much knowledge, and is not the ideal introduction, but it does capture the evidence to date. Ultimately the paper is not sympathetic to the theory. It is available as a PDF here. Excerpt:
The success of the abiogenic theory can be seen by the fact that more than 80 oil and gas fields in the Caspian district have been explored and developed in crystalline basement rock on the basis of this theory.
An emerging third theory is that bacteria living within rocks produce oil. In this theory there is a biological component (the bacteria) which constitute the oil-generating process, but the originating material in not degraded organic material, but rather geological carbon gases. The path is carbon gas --> bug --> oil. Craig Venter and others are exploring the idea of engineering bacteria to make oil from other carbon gases, like CO2. Different bacteria could also be involved in reforming organic material into oil; there may be a multitude of ways oil forms.
In any case I am betting on bacteria as the creators of oil simply because I've learned to never bet against bacteria.