sounds like a blown head gasket, warped head, or cracked cylinder
if it is lowering oil and water both and is not leaking it may have a blown head gasket and it is going out the tailpipe
white smoke out tailpipe.............coolant in engine oil looks like a chocolate milkshake
check your dipstick...if its really watery...prolly a good sign...not to mention your oil WONT exactly smell like oil.
make sure its actually oil and not a mixture of condensation and black carbon..does it feel oily or more watery? oil would usually get burned and cause a light blue colored smoke out the tailpipe
Steam from the tailpipe, and water in the oil means you have a faulty head gasket. Not a good thing. The steam is the antifreeze/water coolant leaking into the heads (bad gasket) getting heated by the engine and coming out as steam. The water in the oil is the same deal, but it;s collecting in the oil so it isn't coming out of the tailpipe. You need a new head gasket. I promise.
oil getting by the rings causes white smoke and oil dripping out of the tailpipe.
When oil comes out of the tailpipe it's time to see your machanic. the Piston Rings are worn, and need to be replaced.
Burning oil
Water (condensation) is a normal condition with a cold engine as stated below, but not oil?? Perhaps a bad head gasket/cracked head/ or block Water coming out of the tailpipe is not uncommon. You will probably see on a lot of cars on humid days with water coming out of the tailpipe usually it goes away once your engine and exhausts have warmed up. Check out the links below for better explanation. It also depends on how old your truck is. Trucks with less than 1000 miles on them sometimes have an oily residue exit out of the tailpipe. During maunafacturing of exhaust pipes, lubricants are used to prevent rust. Check the oil with a blacklight because a dye is usually added to initial oil in the engine. If you have a diesel, then you may have oil coming from the engine, loosen the exhaust pipe from the turbocharger and look for signs of oil exiting the tailpipe. If the turbo is leaking oil you probably have worn bearings in it and possibe wheel hub replacement.
You are burning oil.
oil leaking out of the muffer and the air filter oil leaking out of the muffer and the air filter oil leaking out of the muffer and the air filter oil leaking out of the muffer and the air filter
------------------------------------------------------------ or the Piston Rings are bad... if it uses allot of oil.