The dark days of February 2016, when oil and stock prices were in a race to the bottom, are a distant memory. The lows were hit on Feb. 11, when the S&P 500 Index closed a bit above 1,829 and West Texas Intermediate crude settled just north of $26 a barrel.

Since then, of course, the S&P 500 SPX, -0.84% has hit new highs, while crude prices have more than doubled. They’re a bit off their 52-week high of $55.22.

And since the election, energy stocks have been among the best performers. The Energy Select Sector SPDR XLE, +0.14% has risen almost 8%, as investors expect the Trump administration to stoke economic growth, and cut taxes and regulations.

But one energy fund manager who correctly predicted the previous big drop in oil prices cautions investors not to get too complacent.

“ “We don’t think there’s much left to the rally. We’re looking at an oil-price peak somewhere around here by the end of the first quarter, beginning of the second quarter.” ” — Shawn Driscoll, T. Rowe Price New Era Fund

“We look at this as a typical counter-trend rally that tends to happen during long bear markets,” said Shawn Driscoll, who has managed the $3.6 billion T. Rowe Price New Era Fund PRNEX, +0.27% for three years and been with the firm for 11. He says oil is still in a long-term bear market and the worst isn’t over.

Driscoll, whose mutual fund has soared 40% in the past year, was an early bear on oil and other commodities. In November 2014, with crude changing hands above $80, he told this column oil would fall to $50 a barrel. When it hit that mark only weeks later, he said it was heading into the $30s. And last January, he said it could fall into the mid-$20s over the next six months but would ultimately trade in the teens.

Obviously the latter hasn’t happened, yet, but Driscoll is sticking to his guns.

In an interview, he said the Organization of Petroleum Exporting Countries’ (OPEC) production cuts have helped the market firm over the short run. “Things stabilized faster than I expected,” he acknowledged.

But he thinks secular problems of oversupply and rising productivity, which enables producers, particularly U.S. shale-oil companies, to pump more oil at lower prices, will depress prices. Unless we see a major economic boom, the structural supply-demand imbalance could last years.

“I don’t think anything’s changed long term,” he told me. “We don’t think there’s much left to the rally. We’re looking at an oil-price peak somewhere around here by the end of the first quarter, beginning of the second quarter, then it’s back in the soup, so to speak.”

The underlying problem, he explained, is that when prices started rising, many U.S. shale producers started drilling again even though oil is way below its 2008 peak of $146. U.S. oil production is now around 8.8 million barrels a day, he said, and it could grow by as much as a million. Russia, which is chafing under Western sanctions and is desperate for revenue, is pumping over 11 million barrels daily.

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Meanwhile, OPEC members boosted production ahead of November’s agreed cuts, under which Saudi Arabia will produce 10 million barrels a day. Iran, now free of U.S.-led sanctions imposed before the nuclear deal was signed, is back up to its previous production of 3.7 million. And despite continuing warfare with ISIS, Iraq “keeps growing well beyond what everyone thought was possible,” said Driscoll. It’s producing 4.6 million barrels daily, which it would cut to 4.35 million under the OPEC deal, he told me.

Plus, he said, “You have projects that started several years ago and are just coming on. In a short-cycle business, that can bring production back extraordinarily quickly, and that’s happening.” Even bankrupt U.S. producers are drilling again, he added.

So, we’re facing a structural oversupply combined with greater efficiency that allows marginal producers to keep pumping rather than get shaken out. In other words, a secular bear market, which for commodities typically lasts 10 to 15 years.

The last two commodities supercycles, which included oil, ran 13 years each, from 1968-1981 and from 1998-2011. The bear market between them lasted 17 years. Driscoll said the current moves in oil prices are very similar to the 1980s.

“You had a big rally in oil from July 1986 to the summer of ’87,” he explained. “Oil went from $10 to $21 and backed all the way to $12 in ’88.” The 1990-1991 recession kept prices “kicking around in the teens.” Ultimately oil prices bottomed in 1998, when the next supercycle began.

Obviously, any boost in economic growth would spur oil demand, but it’s unclear if it would be enough to cut into the oversupply. To Driscoll, however, the die is cast.

“I think people are very confident the worst is over when you see some stocks back to their 2014 highs,” he said. “We think we’re going to see [prices in the $30s] in 2018. The last time we spoke I told you some time during this bear market we’d see [oil in the] teens. I really believe that.”

Howard R. Gold is a MarketWatch columnist and founder and editor of GoldenEgg Investing, which offers exclusive market commentary and simple, low-cost, low-risk retirement investing plans. Follow him on Twitter @howardrgold.