Answer
The oil’s index of refraction must be less than that of water.
Work Step by Step
The oil film appears bright at the edge, therefore at the edge there must be constructive interference between light reflected from the top of the oil film and light reflected from the bottom of the oil film.
The light reflecting from the top surface (light going from air to oil) goes through a $180^{\circ}$ phase shift because oil’s index of refraction is greater than air’s.
At the edge, the thickness of the oil film is much less than a light wavelength. For constructive interference to occur, the light reflecting from the bottom of the oil film (light going from oil to water) must also go through a $180^{\circ}$ phase shift.
This means that water’s index of refraction is greater than that of the oil.