I'd like to thank the OP for sharing his technique. It opened my eyes (for the first time) to the possibility of making paper negatives with a laser printer (as opposed to inkjet on transparency). With access to an 11x17 laser printer/copier at work, I can suddenly make 11x17 negatives (without buying an expensive large format ink jet printer).
Doing a little more research on this, I found this very informative video which uses white beeswax instead of oil. I'm passing it along in case anyone else finds it enlightening.
I find the idea of the beeswax a little more appealing than the oil method. For one thing, it seems like you avoid the longer drying time of oil and it seems a lot less "messy". Also, while you can certainly do this on regular 20 lb. bond paper, I plan to try loading the copier with 16 lb 11x17 vellum (hopefully you can use vellum with the beeswax technique). The Vellum is thinner and more transparent (even without the oil/beeswax) and so should result in an even more transparent negative.