They use a distillation apparatus based on boiling points. The bottom of the apparatus has a heat source, and they feed oil from the bottom. As the component parts rise together in the gaseous phase, some will enter the liquid phase because they have higher boiling points, (as they rise they will start to cool). The apparatus is separated into levels so that when it enters the liquid phase it can empty out through a pipe which will separate oil into its component parts. The process is called Continuous Distillation.
Here is a (fairly bad) diagram:
http://www.pafko.com/history/h_contin.gi鈥?/a>
NOTE: This is how they refine petroleum. I'm assuming oil is the same thing
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