your 18mpg is probably about right considering you are not going faster than stop and go traffic and it sounds like stop and go traffic. Try taking it out on the hwy for 3/4 a tank going 65mph, check your mileage, see if it went up that should tell you more info too.
It wouldn't hurt to change to O2 sensor, most people hesitate with them because of the price. get a good one from IPD or FCP....not napa or some place like that. It will be worth your time to get a good one and will work properly too.
I am jelous you have an M47 though....hehe
chuck
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'88 244 171K, '87 BMW 325e 172K (used to feed a '84 245 'till 227K)
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