This section is from the book "A Treatise On Beverages or The Complete Practical Bottler", by Charles Herman Sulz. Also available from Amazon: A Treatise On Beverages.
Nearly all essential oils which have been distilled in the presence of water, contain a little of the latter in solution, from traces up to perhaps 0.25 or 0.30 per cent., says the American Druggist. When the amount of water is greater than the oil can hold in solution, the latter looks turbid. An essential oil, which becomes turbid when cooled considerably below the average temperature, provided the turbidity is not due to the separation of crystals, is probably saturated with water. The presence of the latter may be demonstrated by dissolving the oil in four or five volumes of petroleum ether (sp. gr. about 0.670), when the solution will appear turbid if water was present. The water can be removed by placing pieces of fused chloride of calcium into the oil, and occasionally agitating.
Lench's test is shaking the suspected oil with petroleum benzine. When water is present the mixture shows milkiness.