Well, a fair few reasons that. In brief....

The first thing to keep in mind is that, as far as Saddam was concerned, Kuwait belonged to him. Even putting aside for one moment his grand strategic goal of becoming the leader of an Arab world united under his control (which would, of course, include Kuwait) he, like many other Iraqi nationalists, saw Kuwait as rightful Iraqi territory.

Kuwait had been a part of the Basra province in the Ottoman Empire, but had become a protectorate of the British government in 1899 and would stay that way until 1961. Iraq, on the other hand, would come into being in 1921, but the feeling that Kuwait had been stolen was very strong (and even existed within Kuwait to an extent, but was not as strong or long-lasting as in Iraq).

An attempt was made in 1961 by the Iraqi government to annex Kuwait, but it went nowhere due to British government intervention. This was taken by Iraqi nationalists as a humiliation, and the very existence of an independent Kuwaiti government as a standing reminder of the perceived dismemberment of Iraq.

Saddam saw the Kuwaiti Emir in a personally negative light, too. He was seen as too decadent and rich (hypocritical coming from Saddam), and this was actually how the leadership of the Iraqi dictatorship viewed Kuwaitis in general. In 1990, Iraqi officials would say that Kuwaitis had to be punished severely for their decadence and comfort they'd lived in while Iraqis had not, and so that they instead could get some of the riches of the annexed Emirate, with Saddam's personal (but seemingly shelved) plan being to divide Kuwait into zones and have it systematically looted by Iraqi tribes.

The main points of hatred by the 1990s, however, was down to the aftermath of the Iran-Iraq War. The Iraqi economy depended on foreign loans to keep together during the conflict, including billions of loans from the Kuwaiti government. Those loans were due by the '90s, and the Kuwaiti government expected repayment - repayment that the Iraqi government simply wasn't in a position to give. In Saddam's mind, his nation waged war on behalf of all Arabs, sacrificing hundreds of thousands of lives for the Arab Nation he wanted to build (and rule). He felt that his loans should be forgiven in light of his perception.

Of course, the Kuwaiti government knew Saddam was waging the war for his own power, and they wanted their money. As such, they began to exert pressure on his regime by increasing oil production (same with the UAE government) to compel him to pay his due sooner. Increased oil production lowered the price of oil, and the Iraqi economy was dependent on oil and needed those prices as high as possible to keep afloat.

Saddam regarded this as an act of war, not least considering the close relationship the Kuwaiti and UAE governments had with the US government, who Saddam regarded as one of his principal opponents in the way of him building his Arab empire. Because of this, and because the Iraqi economy couldn't afford continued low oil prices, he decided to invade. He'd loot Kuwait, steal its oil, gain more territory, and be in a position to exert pressure on other regional governments (like Saudi Arabia's) for his own interests.

This, of course, culminated in the 1990-1991 Gulf War.