I tried to find out more about this as I've always just chucked my (motor) oily stuff in the bin. All I can find are reports and warnings about linseed oil and other plant oil, not fossil oil.You should have heard of that, as it is just as much of a thing. You go in to an auto/truck shop and you should find an airtight can for disposal of oily rags. Though, I fear you can find far too many that don't have them.
It says that the linseed oil heats up due to fast oxidation... motor oil doesn't do that as far as I can tell. I reckon they have airtight can in auto shops because the rags are flammable... but they don't seem to be self-igniting.