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From The Collaborative International Dictionary of English v.0.48:
oiled \oiled\ (oild), a. 1. Covered or treated with oil; dressed with, or soaked in, oil. [1913 Webster] 2. Drunk; inebriated. [slang] [PJC] Oiled silk, silk rendered waterproof by saturation with boiled oil. well oiled, (a) operating smoothly and efficiently. (b) very drink. [slang] [1913 Webster +PJC]