“In the flickering light of the cresset his features were shadowy, but a pair of lambent eyes shone surprisingly in the lurid glow.”
-The People of the Black Circle
Howard used this term regularly in his medieval fiction as his characters tended to inhabit the shadows of night and in such environments this was the counterpart of the modern streetlight in a crime story. In many ways Howard’s tales were crime stories told from the perspective of a sympathetic criminal.
cresset
(ˈkrɛsɪt)
n
(Historical Terms) history a metal basket mounted on a pole in which oil or pitch was burned for illumination
[C14: from Old French craisset, from craisse grease]
Reading the dictionary definition you provide, perhaps he also meant to evoke the blue smoke and acrid smells that would certainly be produced by a crude fuel such as grease or pitch.