You need to manually reset that indicator each time you change your oil. The procedure is in your owners manual. Perform the following to reset it:
1. Turn the key to "Run" position, but don't start the engine.
2. Press the "Eng Met" button on the trip monitor and release. Then within 5 seconds, press and release the "Eng Met" button again.
3. Within 5 seconds of step 2, press and hold the "Gauges" button on the trip monitor. The "Change Oil" light will flash.
4. Hold the "gauges" button until the "Change Oil" light stops flashing and goes out. When the light goes out, the engine oil life monitor is reset. If it doesn't, turn the ignition "Off" and repeat the procedure.
Here is how the OLM works.
GM OIL LIFE SYSTEM...HOW DOES IT REALLY WORK
This is taken from the May 2003 GM Techlink publication
How often should engine oil be changed? 3,000 miles, 5,000 miles, 7,500 miles, 10,000 miles? Actually, all of these are correct, depending on operating conditions. Oil life is affected by many factors other than just miles driven. The type of driving, temperature, and engine load all play a part.
That’s why GM has developed the GM Oil Life System, an electronic watchdog that keeps track of all these variables and notifies the driver when it’s time to change oil. This system has become standard equipment on nearly all GM products since 2000.
Briefly, the Oil Life System is programmed with a certain number of engine revolutions. As the engine runs, this number is reduced until it reaches zero, and the Oil Life light or message comes on. But there’s more. Operating the engine under low or high temperatures, and under high load conditions subtracts (penalizes) extra revolutions, so the light comes on sooner. Changing engine oil according to actual need rather than an inflexible schedule provides several benefits.
First is simplified determination about when to change oil. No more decisions about normal conditions vs. severe conditions. Second is reduced operating costs for GM’s customers, who now have to change oil only when it’s needed. Third is minimizing the amount of used oil that must be disposed of. And fourth, engines will always be running with sufficiently fresh oil, for long life.
Traditionally, the vehicle maintenance schedule has been based on miles or time, while the oil change interval is now based on the GM Oil Life System.
When the change engine oil light or message comes on, it means that service is required on the vehicle. I should be serviced as soon as possible within the next 600 miles. It is possible that, under the best conditions, the engine oil life system may not indicate that vehicle service is necessary for over a year. However, engine oil and filter must be changed at least once per year, and at this time the system must be reset.