the wire to my o2 sensor is broken and needs repair.

will it affect the performance of the o2 sensor if i splice new wire in with butt connectors, or should I solder it in. I have no experience or equipement to solder however.

I'm worried about creating too much resistence in the o2 wire and affecting the readings.

 

It may work acceptably for a while, but the connection will eventually degrade, along with the signal it carries. That will start to affect your fuel bills to the point where a soldering iron and heat shrink tubing will look cheap by comparison.