The Oracle is a benevolent machine allied with the Resistence.

Evidence

1. "She's very old. She's been with us since the beginning [of the Resistence]." There is a body of evidence that Zion and the Resistence- and by extension The Oracle- is older than normal mortal lifespan. Of particular note: The plaque on the Neb makes the Neb as much as 130 years old which could be an intentional reference to the Biblical limit on human life at 120 years in Leviticus... hinting at immortality.

2. Radically different power. All humans seem to have the built in powers of reinforcement (stronger, faster, etc.) and simple telekinesis (bending spoons, floating blocks, etc.)... technology abilities don't count (like remote viewing or skill downloads). So who else has a special ability beyond reinforcement/TK? Agents. They have Possession. So the Oracle might have Prophecy. (if you consider the Cookie as special, don't worry, it falls under tech... just like Agent injections/bugs).

3. Risking lives. Why would the Oracle risk her life, the lives of the potentials, and the lives of everyone who visits her by living in the Matrix? Why doesn't she live in the real world or in a construct? Maybe, she doesn't have a choice. Who else doesn't have a choice about staying in the Matrix? Agents. The Oracle may not be able to go anywhere else and have to live in the Matrix just like the Agents.

4. Names. The Oracle has a function-name (non-proper noun that is literally what she is) just like Agents.

5. Theorem of Medium Elegance. Alternative answers with The Oracle as a human tend to get messy or wanting in terms of explanation (the mystic approach) if put to film.