[VetteVet]

Just about all electrical senders work based on resistance to ground. They either have a high resistance to ground ( temperature) and get lower as the engine gets warmer, or a low resistance to ground and increase as the engine temperature gets warmer.

The gauges work based on 12 volts input, which should be a constant, and the variable resistance to ground from the sender. If the input voltage varies it would cause the gauge to flutter and if the gauge is not grounded well it can cause the same problem.

I would disconnect the sending wire from the sender and watch the gauge to see if it is steady and if the reading changes I.E. full high , full low, or no movement. If it still flutters then it is most probably the gauge, either a poor connection on the input voltage or the gauge ground, or the gauge itself.

If there is no movement on the gauge needle then I would ground the sending unit wire
to a good ground and watch the gauge needle for movement or for a steady reading. If the gauge doesn't flutter then I would suspect the sending unit.

I agree with Wrench that using an oil line pressure gauge to compare with the electrical gauge is a good idea and easy to hook up, if the testing I suggested gives no results.