Oil producer working in Leeds (7)
I believe the answer is:
linseed
'oil producer' is the definition.
(linseed oil)
'working in leeds' is the wordplay.
'working' indicates an anagram.
'in'+'leeds'='inleeds'
'inleeds' anagrammed gives 'LINSEED'.
(Other definitions for linseed that I've seen before include "Source of plant oil" , "Oil applied to cricket bats" , "Oil-producing plant" , "Treatment for bats" , "Type of oil" .)