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It could be any number of things, most likely cause is you have a oil sending unit that is wore out and giving false readings. Either buy a new sending unit and change it out or hook an oil pressure tester to your engine and check the oil pressure.
I'd buy a new sensor and replace it myself, because the vehicle is 23 years old and probably the original sending unit, besides the oil sending unit has to be removed in order to check pressure with mechanical gauge anyway.
Remove the oil pressure sending unit and have a test gauge hooked up and see if the sending unit is defective. If you really have low pressure the engine should be making lots of noises.
Your oil sending unit is located somewhre on the engine. It will be round and about 1 to 1.5 inch across. It will have a wire attached to the top of it. I dont know the specific location on your particular car.
What does it do? It is a diaphram operated device that sends a signal to your oil gage or warning light. The engine side is exposed to oil pressure in the engine. The oil presses against the diaphram. The diaphram is attached to a variable resistor device that operates the gage. Low pressure on the diaphram -= low signal to the gage; Hight pressure on the diaphram = high signal to the gage.
you have an oil pressure sending unit located at rear of engine next to distributor. that would cause the oil gauge not to work. also look for a short in electrical wires to oil sending unit. hope this will help!!!
Your problem opens several questions...Is the motor knocking or tapping? have you made sure the wire on the sending unit is connected? If knocking, you may have bad engine bearings. If not, sending unit may have failed or be disconnected.
The best way to check it is too hook up an external gauge where the sending unit is too see if it's the engine oil pump, or the sending unit itself. But, sending units are the most common issue.
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