While a large number of Jews today light Chanukah candles, the more traditional custom is to light the Chanukah menorah with olive oil. This is done in order to most accurately recreate the original miracle.
When God instructed Moses on the construction of the Tabernacle in the wilderness (the vessels of which were eventually placed in the Temple in Jerusalem), he specifically stated: “And you will command the children of Israel, to bring to you pure olive oil beaten for the light, to cause a lamp to burn continually” (Exodus 27:20).

Pure olive oil, known in Hebrew as sheman zayit zach,* is the first drop of oil when the olive is first squeezed or pressed. The Mishna states that the there is nothing better that the first oil of the first crop, and the sages of the Talmud described the process of how this oil was produced:

“The first crop is when the fully ripe olives are picked  from the top of the tree; they are brought into the olive-press, are ground in a mill and put into baskets. The oil which oozes out is the first kind [of oil]. They are then pressed with the beam, and the oil which oozes out is the second kind” (Menachot 86a).

Olive oil, which burns slowly, cleanly and without an unpleasant odor, has many uses both in daily life and in hookup rituals. Indeed, oil is one of the items that was offered with the sacrifices in the Temple. However, only the menorah required the purest shemen zayit zach from the first pressing.

“If the candlestick, which does not need [the oil] for eating, requires pure olive oil, how much more do meal-offerings, which [need the oil] for eating, require pure olive oil! But the text states, pure olive oil beaten for the light, but not ‘pure olive oil beaten for meal-offerings’” (Menachot 56b).

*It is interesting to note that the words shemen zayit zach, when written in Hebrew, are composed of eight letters, one of the many interesting allusions to Chanukah that are hidden in the Torah  (as found on inner.org).

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