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Because its particles aren't as close together weighing it down. Water particles (H2O) are closer together (making the substance more dense) because they "want" to hydrogen bond with each other, which is energetically favorable. Oil (or any hydrocarbon) mainly "want" to just not be pushed up to another molecule so are farther apart at normal temperatures. Under very cold conditions this is less so (water is peculiar in that when it freezes it actually becomes less dense, that's why ice floats).

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