Without it you will break down, quickly. This is why it is so unsettling to see an oily black spot under your vehicle - you've sprung a leak! No need to panic - you check your oil regularly, right? Most cars with 100,00 miles or more will burn a little oil between changes so don't panic is it's a little low occasionally, add some engine oil when needed and you'll be fine.
Anyway, back to that leak you found. There are a few places that oil could be coming from, and the trick is figuring out the source of the leak, and how fast it's coming out. The most reliable way to find the source of your leak is to clean the engine so you'll be able to see the oil start to ooze before it's all over the place. This is especially important if you've been adding oil regularly because you may have a larger leak to deal with. If you can't clean the engine first, look for the area where the oil is the freshest! When the oil leaves the engine it's very liquid, it's when it runs around and picks up gunk that it gets thick and lumpy!
There are a few areas that can be the source of an oil leak. The Valve Cover Gasket is the most likely culprit if the leak is high, but there are also PCV Valves on many cars that can come worn or loose and cause a leak.
As you get about halfway down the engine, you'll find The Head Gasket. Oil passes through passageways that connect to each other on either side of this gasket, so there is lots of oil in this area. If your head gasket has gone bad, you can spring a leak. Another sign of a blown head gasket is oil in your coolant, which looks like a light brown froth floating through your cooling system.
Moving even further down, your will find The Oil Pan Gasket, which is the gasket you hope is the source of your leak. The oil pan hangs on the very bottom of the engine, and is where the oil drains into when it's being changed. There is always plenty of oil sloshing around down here, so even a small gasket failure can ooze like crazy!
Of course, there are always other places your oil leak can be but there are the most common, and easiest to check! If you don't find it at any of these areas, continue to search until you do! Wherever you find it, it will need to be fixed.