Ive got a 2005 avalanche and for the past year probably ive had this issue and now its just getting annoying. My oil pressure gauge has never worked properly. When my truck is running the gauge sits at 80 maxed out, when I gas my truck hard it will drop the gauge to 0 and flash low oil pressure on the dash. The truck has never run improperly do the issue. Im just tired of getting the warning flashed at me for no reason. Sensor? need help trying to resolve this

 

Since you are getting the low oil pressure signal as well as a jumpy gauge, I would say it is the sensor. There is a problem with the gauges on that year truck, but it doesn't sound like that is the problem in your case.