Smear last bit of oil into power tool (7)
I believe the answer is:
slander
'smear' is the definition.
(I know that smear can be written as slander)
'last bit of oil into power tool' is the wordplay.
'last bit of' indicates one should take the final letters.
'into' means one lot of letters goes inside another.
'power tool' becomes 'sander' (sander is a kind of power tool).
The final letter of 'oil' is 'l'.
'l' placed into 'sander' is 'SLANDER'.
(Other definitions for slander that I've seen before include "False malicious spoken statement" , "Belittle" , "Speak ill of" , "Damaging statements" , "Sling mud at" .)