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On many installations, including mine, an oil pressure sensor/sender is installed at that location. Some prefer to attach a hose so that the sensor can be installed remotely (eg, on a bulkhead); this has the advantage of reducing the weight and vibration acting on the brass tube. Yes, you can cap it, but in that case you'd need to install your oil sensor at another location (eg, with a tee off of the connection where your oil pressure safety switch is now installed).
Jack.
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