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When an object of volume V is submerged in a liquid, the object experiences an upward force equal to the weight of the fluid it has displaced (the weight of a volume V of fluid). Oil is less dense than water (the oil floating on the surface of the Gulf of Mexico after the Deep Horizon catastrophe is an example of this), so a given volume of oil weighs less than the same volume of water.

This means that a penny of volume V submerged in oil feels the weight of gravity pushing it down, and the weight of a volume V of oil pushing it up. The upward weight pushing the penny up is less in oil than in water, so the penny will sink faster in water, theoretically.

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