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Oil and water do not mix because they have different chemical compositions, and as such, have different physical properties. Oil is composed of the elements carbon and hydrogen, compounds called hydrocarbons. They are typically less dense than water, which promotes the "separation" effect of oil and water not mixing. Water is composed of the two elements oxygen and hydrogen. Water molecules are more dense than oil, so they tend to go to the bottom when mixed together. Oil tends to have stronger cohesive properties, which means it "clings" to everything it comes in contact with. Soaps and detergents lessen this cohesiveness, which is why you need to use soap when you wash your hands, to loosen the cohesiveness of the dirt in the oil, which then easily mixes with the water and is washed away. Anything from a crude oil distillation would qualify as an oil product, such as heating oil, machine oil, gasoline, jet fuel, diesel kerosene.
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