Oil in air system

No oil should be in there. The compressor is most likely passing oil. To confirm this, get the engine up to temp and then remove the air compressor discharge line. Hold a piece of cardboard a few inches from the open outlet fitting of the air compressor. Run the engine for about 1 min so that the air from the compressor is blowing on the cardboard. If the compressor is passing oil it will leave oil splattered on the cardboard. A few speckles of light oil is normal, but if the cardboard has big splatter stains afterwards this means trouble. The cardboard test isn't generally accepted much anymore, but it is an easy field test for owners to do on their own. Air compressors will pass oil if their air intakes are restricted, or if the oil drain for it's crankcase is restricted, so make sure they are good too. If your air compressor is bad, and you change it, you must also replace/rebuild your air dryer because the oil destroys it.

 

You could just be seeing dirty brown water. Could be just needing a dryer

 

This is why it is important for you tell us what truck it is, model and year, what engine you have. It depends on what you have. Most trucks have the compressor intake plumbed into the piping between main filter and the turbo. Others have a pipe between the intake manifold and compressor.

 

The air compressor intake is a hose from the intake manifold on that. Just make sure it isn't kinked or collapsed.

 

I'm pretty sure that my air compressor was going out to begin with, but when I replaced my air compressor on my 96 Pete with a 5EK Cat I found a bunch of oil in the air compressor intake hose. Come to find out my turbo was going out. Man did I get lucky finding it then!

 

Like was stated do the compressor card test the spec is a 2 inch circle in 1 minute. at 1200 RPM with the engine hot. From the discharge hose.
Remove the intake hose from the manifold and do the same test there. Wear a leather glove, it is hot on the hand.
If it passes both tests then you are not draining you tanks regularly, Every time you are parked on a elevation change you should drain the air tank with the drain valve at the lower end.
Just because it has a dryer does not mean it cleans out everything even with a new dryer cartridge.
Just a thought!