This compound changes colour from rusty orange to bright red when it is in contact with water.
Rub some on the lower part of a dipstick to check inside your oil tank for the presence of water. Oil and water do not mix and water is heavier than oil so water will always sink to the bottom of the tank.
Water is always present in oil tanks due to condensation when temperatures inside and outside the tank differ. Build-up of water can cause costly damage if it reaches the oil burner so it is advisable to fit a ‘water gripper’ to remove any water present.