Your engine oil does two things. Primarily it stops all the metal surfaces in your engine from grinding together and tearing themselves apart from friction, but it also transfers heat away from the combustion cycle. Engine oil must also be able to hold in suspension all the nasty by-products of combustion such as silica (silicon oxide) and acids. Finally, engine oil minimises the exposure to oxygen and thus oxidation at higher temperatures. It does all of these things under tremendous heat and pressure.
This is how to read the numbers. For example 5W40?
As oils heat up, they generally get thinner. Single grade oils get too thin when hot for most modern engines which is where multigrade oil comes in. The idea is simple - use science and physics to prevent the base oil from getting as thin as it would normally do when it gets hot. There's more detail on this later in the page under both viscosity, and SAE ratings. But as a quick primer - the number before the 'W' is the 'cold' viscosity rating of the oil, and the number after the 'W' is the 'hot' viscosity rating. So a 5W40 oil is one which behaves like a 5-rated single grade oil when cold, but doesn't thin any more than a 40-rated single grade oil when hot. The lower the 'winter' number (hence the 'W'), the easier the engine will turn over when starting in cold climates.
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