The problem with "recycling" oil is that for the most part, it is actually downcycled. A majority of it is burned (albeit for electricity production), but it is not "recycled" into useable lube oil. It is of course better to downcycle then for people to dump hundreds of millions of gallons of oil into the ground, bay, etc.
Earth911
This is a pretty interesting article.
Can Oil be Recycled
If we are burning recovered oil, then burning something like palm would be better, because that would be similar to burning biodiesel (zero carbon footprint)