It is increasingly clear how vital fossil fuels have become to meeting our world's energy demands. Soon, we're going to run out of excuses.

Who to blame? It's the question we've all been asking ourselves lately.

We know the world's oil supply is getting tighter. That would seem obvious in light of oil holding steady around $80 a barrel.

Even the cheery petroleum report by the Energy Information Agency (EIA) wasn't enough to drop oil prices. Crude oil stocks grew by 800,000 barrels this week. If you remember from Tuesday, I mentioned how crude oil prices typically begin to dip this time of year. 

Notice the sharp increase recently and compare that to last year's decline. As you can clearly see, something is keeping it up.

Buried underneath the rosy EIA report this week was an ugly fact. Despite the 800,000 barrel increase in stocks, that's still a 7.6 million barrel drop from last year. Instead of focusing on the real problem at hand, however, we're looking around trying to point the finger somewhere else. 

Soaring Consumption
Wasn't this hurricane season supposed to be particularly nasty? Well, that turned out to be a dud. There's no doubt that oil prices will start heading south now that we're reaching the end of the hurricane season, right? 

I wouldn't bet on it.

So if the weather isn't to blame, then clearly we can point to the geopolitical mess around us. The problem, however, is that the geopolitical scene is rather calm.

Iran (still adamantly denying any wrongdoings in their controversial nuclear program) appears to be playing nice for now. But shouldn't they? They're getting exactly what they want.

News from the Nigeria seems upbeat. There have been fewer attacks by insurgents lately, resulting in a slight increase in oil production.

If we can't blame weather or politics, eventually our fingers point back at us.

Production Woes
Our 85-million-barrels-per-day addiction is only part of the problem. You see, our surging consumption rates are at a point where production can't possibly keep up.

Not only is production failing to keep up, but it's crashing down all around us.

Think about this for a minute . . .

This past May, my readers found out about OPEC's shady reserves reporting. Some of these reserves literally doubled overnight. Eventually, karma is going to catch up with them. 

In fact, it may already have done so . . .

OPEC recently cut Venezuela's production quota to 2.47 million barrels a day. That's a drop of 750,000 barrels a day. The reason is that OPEC suspects their production figures are a bit fishy.

Yet Venezuela is determined to keep their production delusions going. They reported that despite a shortage of the rigs needed to maintain current production, the country can still increase production by a quarter million barrels. 

I'll believe it when I see it. The fact is that after ousting the foreign oil companies, the lack of investment is going to seriously damage the country's future production.

As it stands now, the world needs to find over three million new barrels of oil every year just to make up for oilfield decline. In other words, we're already starting in the hole.

Don't get me wrong, weather and politics can have a devastating impact on the oil market. But when it comes to our future of higher oil prices and drastically lower production, there's only one thing left to blame . . .