Answer
B. Oil is nonpolar, but water is polar.
Step-by-step explanation
Water is held together by hydrogen bonds. Hence water is a polar molecule. Oils and fats do not have any polar part and so for them to dissolve in water they would have to break some of water hydrogen bonds.
So, non-polar molecules (e.g oil) can only mix well with other non-polar molecules and not with polar molecules like water. Therefore, this explains why oil doesn't mix well with water.
The correct answer is: B. Oil is nonpolar, but water is polar.