Fuel compared to first of oil in middle of well (7)
I believe the answer is:
ethanol
'fuel' is the definition.
'compared to first of oil in middle of well' is the wordplay.
'compared to' becomes 'than' (I've seen this before).
'first of oil' becomes 'o' (1st letter of 'oil').
'in' is an insertion indicator.
'middle of' means to look at the middle letters.
The middle letters of 'well' are 'el'.
'than'+'o'='thano'
'thano' inserted into 'el' is 'ETHANOL'.
(Other definitions for ethanol that I've seen before include "constituent for a dram?" , "intoxicating stuff" , "Intoxicant in wine, spirits, etc" , "porter uses it" , "spirit" .)