if its an oiler take it off and bin it .u need a seperate airline if your using it for air tools . just 3 drops of oil in the tool before use and thats suficient . the only time oilers are needed is on production line when tools are running 24 seven and will never get looked at
Looks like a coalescing filter, they remove oil from the air so worth using one when spraying, they are not all of correct filtration for breathing air though so you need to check if this is what you intend to use it for.