Water is a compound made of millions upon millions of tiny little molecules, each with a positive charge at one end and a negative charge at the other. These types of molecules are called "polar molecules." The reason water sticks together is because the positive charge of one end of a molecule will attract the negative end of the molecule next to it, and so on! Many other molecules, such as the ones that make up salt or vinegar, are also polar, which is why they mix with water so easily.
The molecules that make up oils are also charged, but its positive and negative charges are spread out more evenly. This makes it a "nonpolar molecule." Because the water molecules are unable to find a negative charge to connect their positive ones to, they can only mix with nonpolar molecules for a very short time such as when you shake up that salad dressing! before separating again.
ExplorationMix It Up!
Here is a quick and easy experiment to see for yourself how oil and water just don't get along!
Take two glasses and fill each halfway with some warm water and a few drops of food coloring. To the first glass, add a spoonful of sugar. To the other, a spoonful of cooking oil. Now stir the contents of each glass well...really get it going!
After a few minutes, take a look at the glasses. What happened to the sugar? What happened to the oil? Is the sugar made of polar or nonpolar molecules?