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Any white foam on the cap indicates water in the oil. Mild white foaming may just be that the car is not warming up properly or its just cold and damp weather and the oil cap is not giving a good seal - can be caused by too many short journeys. Foaming around the dipstick is likely to be more indicative of internal leaking around the head gasket or maybe water in the engine bay from jet washing as a temporary thing. Keep an eye on it an wipe clean to see if it clears up and take the car for a drive in excess of 6 miles or more to warm up properly. Extra indicators like overheating whilst stationary and a rancid smell accompany head gasket failure. Also worth checking the expansion tank as if water is moving into the oil, oil will also move into the water and create a rainbow on the water which is definitely head gasket problems. Poor performance of the vehicle and stalling is also a result of head gasket failure but depends how and where it is leaking.

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The above is correct, but if your oil level does not increase without any assistance then it would be acceptable to assume that the oil is not being contaminated.

From your question, I would guess that the engine oil is 'aerated' (it's got bubbles in it!). Not having come across this type of situation before I would think that maybe you are possibly using an inferior brand of engine oil, the oil has deteriorated allowing foaming to occur, or you may have some problem within the engine that is possible over-pressurising the crankcase!

You haven't mentioned anything about how long the oil has been in the engine, noises or lacking power etc so my advise is that the oil and filter need to be replaced with a good quality brand.

Engine oils have several constituents in them and one of these is an 'anti-foaming' agent.

Note:

You may see this answer as not being of great importance, but you do need to sort this problem out as soon as possible; if your oil is 'aerated' then you will not get the correct level of lubrication throughout the engine and it will wear much quicker than normal and engine oil is also used to effectively keep the engine from overheating.

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Q: The oil on the engine oil dipstick is foamy after a drive when it sits for awhile the oil looks perfect?
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