since we have no idea what the mileage is or any other information as to the condition of the engine i will say "professionally" not to use the 5w20..
I am a big fan of 5w20 in engines with overhead cams and tight clearances but not that engine those engines are good but even new they were sloppy as were a lot of great engines back then. Using 5w20 will hurt your oil pressure and bearings and will even use more oil. back then many were using 10w40 and even 20w50 i remember very clearly i got out of school and went to work in the engine shop i own now and was obsessed with cars thats all i talked about..lol
I advise caution. If the engine runs fine on 30-weight, why make a change? Look for some 10or15w40 on sale and mix with 5w20 to make a 30-weight. I wouldn't run 20-weight in an engine of that vintage unless the owner's manual says it's OK.
I would use a 5W30.
I really do not get it when people buy oil that might not be the best just because it was on sale.
I decide on what oil to use and then keep with that oil. Sure its great if I can find it on sale.
I love AMC cars....awesome ride you have! Growing up, my dad's best friend had a 1976 Gremlin, I loved that car. Pics of it are in the photo section.
As others have said, on an old-school I-6 you want to go a bit thicker...now you don't need to go overkill and use 20W-50, even in the summer. Stick with a thick 30-weight, like a HDEO 10W-30, or HM 10W-30, and you'll be golden.
Now, seeing as you have 5W-20, do blend it with a 15W-40 50-50 to make a nice 10W-30.
Post pics\details of the car?
The non-adjustable valve train can be noisy, but I wouldn't call these engines "sloppy". Clearance wise, they are just as tight as a modern engine (I use and rebuild a decent amount of Jeep engines, BTW).
I don't think 5W20 would be optimal, but realistically, the engine would run fine. It will most certainly not "hurt" anything. Synthetic started to go mainstream when this engine was new, and IIRC, 5W20 was the offered viscosity.
You would need an accurate oil pressure gauge to determine if it's acceptable. A previous member here ran a custom 0W10 in his Jeep 2.5L four cylinder, which has the same architecture as your 4.2L. His UOA numbers were pretty decent (not that UOA's are the best tool for determining engine wear).
Ultimately, if it's your daily driver, I would play it safe and stay with 5W30. For me, my current off road project is a custom Tube chassis powered by a Jeep 2.5L utilizing a turbo setup (possibly Volvo). I intend to play around with oil viscosities and my sights are set on a synthetic 0W20.
AMC straight sixes don't run very high oil pressure to start with, drops a good bit with age (oil pump issues, generally). I'd only run a 5w20 if I had a pressure gauge on it to make sure its staying in a decent range.
Even then, I don't think its very optimal. If anything, AMC sixes show better wear numbers on a grade heavier than spec (xw40) than anything. Going a grade thinner won't blow it up, but why do it?
In the late 70s I used M1 5-20 in a new Dodge Slant 6 engine. Performed well but used a little more oil than the 10-40 Valvo I had been using. However cold starts were much better in the cold temps of Maine.
No don't do it.
I've never seen a UOA for a 258 that old, but the Jeep cousins/descendants of that engine display higher wear numbers on thinner oil, particularly aluminum. They just aren't made for it.
I honestly don't care for 5w30 in mine but run it during the cold months. Other than in winter a heavy 30 grade / light 40 grade is optimum for these engines IMO.