'98 3.8L Oil Pressure gauge flickering....WTF?

If it's rapid movement, it's probably just the harness or the sensor. The oil pressure sensors are known for going out. They're like $10 at the dealer and easy to replace.

I have had this problem for years.I spent a lot of time diagnosing this.

Let me try and explain this briefly.The oil senders on most newer Fords including the Mustang are NOT variable pressure senders like they are on..say a 92 5.0 mustang or F-150.The newer senders are simply on/off switches..Very dumb and a cheap idea of Ford.When the oil pressure is below 7 psi,the signal output reads 0 volts...or the gauge needle is fully to the left.When the pressure is above 7 psi,the pressure switch turns on and reads 5 - 6 volts....or the gauge shows the needle within the middle of the gauge (around "RM" in "NORMAL").So...its either "On" or it's "Off".If the needle flickers around like that,the cause can be a couple of different things.The most likely culprit,a bad pressure sending unit.An internal seal within the sender goes bad and oil gets into the electrical "pressure switch" causing variations in current flow output.Oil is an excellent insulator and extremely poor conductor.

The other possibility...as Skymarshal pointed out, a bad ground.Check the wiring to the sender pin.Remove it, scuff the pin with a wire brush then spray it with electrical contact cleaner.If this doesn't fix the prob..then replace the sender.If you do replace it,DO NOT buy one from Autozone.They have the worst quality.