The invention provides methods of modifying the lipids produced by microbial organisms through genetic engineering. The invention also provides genetically engineered microbes and methods of fermenting microbes for oil production. Also provided are oils, fuels, oleochemicals, chemical precursors, and other compounds manufactured by such modified microorganisms. Exemplary oil-bearing organisms include organisms containing one or more exogenous genes encoding a fatty acyl-ACP thioesterase, fatty acyl-CoA/aldehyde reductase, fatty acyl-CoA reductase, fatty aldehyde reductase, fatty aldehyde decarbonylase, and/or an acyl carrier protein.