Are rancidity and oil separation the same thing?

No. Rancidity results from a chemical process in which oxygen breaks down the molecular structures of lipids-- the technical term for fats--and changes a food's flavor and odor in unappetizing ways. The process is triggered by oxidation, a normal occurrence in foods.
 
Oil separation occurs when the fats disassociate from peanut particles and pool on top of the contents of the jar.
 
Source(s):
Livescience.com "Can Peanut Butter Go Bad?"
 

 
 

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