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Engine Oil:

Engine oil provides more then just lubrication for the engines moving parts.

Engine oils provide sealing, cooling, anti-oxidation, rust prevention, and deposit buildup qualities. As a thin film of oil builds up in the cylinder walls, it seals the piston rings, preventing blow by. The flow of oil over hot internal parts aids in cooling. Additives in the oil help prevent rust and carbon deposits.

Engine oils are rated by viscosity. This rating has nothing to do with the quality of
the oil. Viscosity is the resistance to flow. Oil is heated to a set temperature. Then,
it is poured into a calibrated viscosity cup and allowed to drain. Its drain time
is measured, and given a SAE rating. 
There are a number of ratings:, mono-grade (SAE30), and multigrade (SAE10w-30). Mono-grade means the oil will stay at that rating when cold or hot. In multigrade oil, it starts cold at the first number in the rating. As the oil heats up, it acts as the second number of the rating. Additives called viscosity index improvers (VI) achieve this.  
Example: a SAE 10W-30 (w-winter) will start on a cold day with a viscosity rating of 10, as it heats up it will act like a 30 rated viscosity oil.