Crude oil prices have been on a tear since hitting 13-year lows near $26/bbl back in February. However, with WTI now trading above $42/bbl, Morgan Stanley sees very little upside remaining for now.

At the Dubai Commodities Conference, analyst Adam Longston argued that the recent oil rally was driven more by technicals than by underlying improvement in the oil market.

“In an oversupplied market, there are few fundamental factors to support pricing,” Longston explains. “Momentum, FX, macro trends and headlines are the primary factors along with hedging flows—led by macro/quant.”

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As long as global markets remain oversupplied, Morgan Stanley expects WTI to trade within the $25-45/bbl range. One of the major pressures that oil prices begin to face in the $40 range is hedging by underhedged producers.

While most oil bulls believe that the oversupply will soon be corrected by a drop in global production, Longston says that it’s not always that simple. He warns investors that producers don’t always behave rationally.

In addition, the long lead times of 5-7 years for large international projects means that, for the next several years, supply will continue to be boosted by international projects that began during the 2006-2014 boom.

So far in 2016 the United States Oil Fund LP (ETF) (NYSE: USO) is down 5.0 percent.

Disclosure: the author holds no position in the stocks mentioned.