Oil level sensor bad or gremlins?

OK. This is annoying. I start my car and the low oil light is on. So I stop. Restart the engine and it goes away. Same routine every morning. Oil level looks fine. I figured if its a bad sensor shouldn't it always be on since that is the constitutive default? The connection the sensor looks good. I'm lost.

To answer your question, not necessarily. There are two possible issues. As you state bad wire or bad sensor. I would change the sensor since you have checked the wiring. It is possible that the sensor has faulted internally or that there is a bad connector on the sensor itself.

I had the exact same problem in my 95, 3.1L. I replaced the sensor and that fixed it. It is strange but it seems like it's not an uncommon failure.