Do I have a misunderstanding of how this should work.I fly the same aircraft oil quantity at departure is 18 Left/ 19 Right. I fly it all day and when Im terminating the flight for the night, it reads 17 Left / 18 Right, I lost a quart through out the day. (Very realistic may I add). I start FSX the next morning with the same aircraft and it reads 18 Left /19 Right again. Should it have not been at 17 & 18 the way it arrived the night before?

Did you save the panel state?

Afaik, service based failures have to do with parts of the plane, not fluids.If you start a new flight every time, you should have the default levels of fuel, oil, etc that is programmed into the NGX.Failure based settings would have to do with things like your tires blowing after a while if you don't service them through the CDU menu.