The hot furnace gases that are used for heat-treating steel oxidise the alloying elements, such as chromium, to form a thin surface film. These surface films interfere with visible light waves to produce the colours that your correspondent mentions. The thickness of the films determines the apparent colour of the steel as it interacts with light of different wavelengths. Thinner films, which are formed at lower temperatures, seem yellow or gold.
Thicker films make the steel appear light blue.
The thickest films seem midnight blue and finally black. Temper colours on clean, bare steel are actually quite fragile, and are quickly lost if rusting thickens the surface film by depositing layers of hydrated iron oxides. The sperm oil gives a transparent, waxy protective covering to the oxide films, preserving their colours for posterity. Widespread use of this technique has had the obvious disadvantage of producing a serious shortage of sperm whales.