yep. Ikea has the cheapest mineral oil I've seen in Singapore, that is easily available. Mineral oil is a great protectant but due to its low viscosity, it can be quite gummy. But it is food safe - Ikea sells it for the purposes of oiling your wooden chopping boards.
Alternative is Tuffglide Marine (you can find it at specialty hardware shops) but I'm not sure if it's food safe.
WD40 is great as a quick fix but not long term lubricant or corrosion protectant nor is it food safe (due to the solvents and petroleum based products).
You can see the MSDS here:
http://www.wd40company.com/files/pdf/msds-wd494716385.pdf
Actually, you can also use cooking oil as a protectant (but you need to wipe it off and put fresh oil regularly since oil will turn rancid over time) or other oils. Some people even use wax (like car wax or rennaisance wax) - but removing wax is a real hassle. And if you are going to resharpen your knives, wax will gum up your benchstones/diamond plates.
re: long term storage in leather sheaths - yes, avoid that. Treated leather has lots of chemicals/minerals in them that may cause corrosion, staining.
If you look around, you may also be able to buy bags that contain corrosive inhibitors like 'zerust':
http://www.zerust.com/product/film/ict-vcibags
If you buy Japanese kitchen knives, they come packed in such papers.