US city alarm: oil spilling (8)
I believe the answer is:
amarillo
'us city' is the definition.
'alarm oil spilling' is the wordplay.
'spilling' indicates an anagram.
'alarm'+'oil'='alarmoil'
'alarmoil' with letters rearranged gives 'AMARILLO'.
(Other definitions for amarillo that I've seen before include "There's a strange oil alarm in this Texan town" , "Texas panhandle city" , "Texan city made famous in the song ''Is this the way to ...''" , "Oil alarm (anag) - Texas city" , "Neil Sedaka song 'Is this the Way to . . . . . . . .'" .)