Analogies can be a good thing. They can be incredibly useful in education; when trying to explain an unfamilliar concept by relating it to something familliar. This is a completely neutral action and I urge you to use them in this manner whenever you wish. You have my blessing.
Analogies used in an argument are nearly always utter crap. But even when a great analogy is used, it more than likely shouldn't have been. There are many issues, but they all stem from one thing: analogies are not equivalencies. Meaning that even in a great analogy, the situations will always have differences. "Oil is like water" gives you some understanding of what oil is like if you have never seen it, but it doesn't give you the full picture. You would never want to drink oil, for instance, but it is still a "valid" analogy.
Immediately, we come across what is likely the biggest reason that analogies in arguments are a terrible idea. Right now, in your head, you're probably thinking of all the ways that oil is unlike water, and all of the qualifiers that could be added to the analogy to make it more accurate and "correct". There's nothing wrong with this in itself, for at the moment, you mostly just have concern for the hypothetical person who doesn't know what oil is, and want them to have as clear a picture as possible.
But now imagine there are two people addressing this poor fellow. One has a vested interest in communicating that the oil is more like water, and the other has a vested interest in communicating that the oil is less like water. We then land ourselves in a death-spiral where both sides offer more and more detailed versions of the analogy that are "more correct" while still supporting their bias. The end result is an analogy so needlessly complex and detailed that it's useless as an analogy; you might as well just be discussing the actual subject directly.
And yes I realize the humour of using an analogy to elucidate my reasoning on why not to use analogies. The tl;dr:
Analogies are never perfect, so they are prone to ridiculous bias when used in an argument. They are also prone to pointless back-and-forth revisions to make the analogy "more correct". This makes the analogy useless, as it'd be simpler to discuss the subject directly.
Pretty much everyone sucks at making analogies anyways, so don't even try. Even you, special snowflake, are at the mercy of confirmation bias.