I think that the surge is due to your cruise control suffering the pains of old age, and not the speedo cable at all.
The speedometer is probably just recording the erratic speed that the cruise amplifier is causing.
My cruise control did thisa once about a year ago, and when I inquired about this at GDI, Peter told me that the amp was in the process of dying.
I haven't had it fixed yet, because most of the time it behaves.
Still, lubricating the cable, if done properly, can't hurt and may solve the problem more cheaply.
Semibodacious Transmogrifications a Specialty
1990 300D 2.5 Turbo sedan 171K (Rudolf)
1985 300D Turbo TD Wagon 219K (Remuda)
"Time flies like and arrow, yet fruit flies like a banana"