I'd head to the vet. My suspicion is a skin infection, which will require a skin scraping and culture to see what kind of infection and how to treat it. The bumps don't look like incoming quills to me...they look strange, which makes me suspect skin infection even more. Until you get to the vet and get answers, don't put any more oil on his skin at all. Oil seals infections in and makes them worse, so it could just be contributing to the problem.
Good luck and let us know what you find out from the vet.