A small amount of oil vapour is normal for a lubricated recip. Puddles at the breather, oil streaming out of the drain, or oil at tools means oil is being pushed past the rings or out the crankcase.
1
Crankcase overfilled
lowReciprocating
CheckOil above the full mark on the dipstick or sight glass.
FixDrain to the correct level (middle of sight glass).
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2
Worn rings causing blow-by
highReciprocating
CheckStrong air flow out of the breather while running.
FixRing rebuild or pump replacement.
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3
Wrong viscosity or non-compressor oil
medReciprocating
CheckThin automotive oil foams and gets past rings.
FixDrain and refill with recommended compressor oil (often ISO 100 / SAE 30 non-detergent).
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4
Breather/vent plugged
lowReciprocating
CheckCrankcase pressurises and forces oil past seals.
FixClean or replace breather.
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Safety
Lockout/tagout before opening enclosures. Verify zero energy. Bleed system pressure before opening any pneumatic connection.