Oil production occurs at the level of the sebaceous gland. There are many more sebaceous glands located in such areas as the face, the chest and the shoulders but sebaceous glands can be found virtually anywhere on the body.
When patients with very active sebaceous glands tell me they do not use a moisturizer daily because they do not need it, I always caution them that this is important in the re-training of their glands to secrete oil or sebum when we need it. In oily skin, the sebaceous glands are active and very good at what they do. They sense on a neurologic level what is going on at the surface of the skin. If someone cleanses her face, and then does not immediately apply a light daily non-comedogenic moisturizer, she will typically see a rebound flush of oil production causing a shiny or greasy complexion an hour or two later.
The reason for this is that the skin sense a dryness occurring at the site of cleansing, and it now instructs the sebaceous glands to get to work and produce sebum or oil to take care of the temporary dryness.
To counteract this rebound oiliness, it is necessary to apply that daily light moisturizer in order to lesson the response by the sebaceous glands. Thus, it is just as important for oily skin types(if not more important!) as it is for dry or sensitive skin types to apply a daily moisturizer, but one that is recommended by your dermatologist, the skincare expert.