I am at a point in the unstable build where I am expected to produce steel items. Unfortunately, I am not completely clear on how to create steel. A quick look at the tools available to me reveals that I need oil to produce it but no part of the game has told me where to get oil. A quick Google search (which I'd prefer not to do, i'd like to stay in-game) has shown me that oil is available on desert planets. But, again, I'm not completely clear on how to find it. I've mined a fair amount but I've yet to encounter it. 1) Can someone help me with finding oil? Are there telltale signs that it's around? Are certain planets more likely to have it than others? 2) To the Starbound team: I think some additional information on crafting steel and finding oil would be greatly benefitial in keeping the player engaged without encouraging them to resort to Google searches.
Oil is (I think) only found in desert planets, so go to the nearest one and check the surface. If it's not on the surface it's underground, and remember that you need to have the matter manipulator upgrade for liquid harvesting to allow you to collect the oil.
Just keep digging around on desert planets. A tar biome is filled with it. You need to have your Matter Manipulator upgraded to get liquids.
I've only found oil underground, in desert planets. Last time I got 1995 from a single "lake". You'll need ten silver bars to upgrade the matter manipulator, but there is another upgrade before, with copper.