FE is good to a point. I'd make sure you filter the used oil to remove suspended solids to a ISO15/13/11 [c] level before running the oil through the FE. FE has limitted capacitites and your flow rate through the media should be slow, 10gpm for a typical HILCO 7x18 element to start.
ION Exchange may be another way to approach your application but I'd think it be cost prohibitive at this point.