Crude (CLK16.NYM) prices are back above $40 per barrel to their highest level this year. But one strategist warns that oil is topping out.

The falling U.S. dollar has given a boost to crude, as have hopes that major producers will be able to come to a production agreement when they meet next month.

However, Bill Baruch, chief market strategist at iiTrader, is skeptical that the rally will persist. He expects U.S. shale oil producers to continue output even though $40 per barrel crude was thought to still be unprofitable for them.

“Forty dollars is the new $60,” said Baruch. “You're going to see more supply, and the glut will get worse here in the United States as well as worldwide.”

Baruch cautions longs that U.S. storage is reaching full capacity in some important locations. “You've got Cushing more than 90% full and Gulf Coast storage just under 90% full,” he said. “That's why I do not see prices maintaining $40 for an extended period of time.“

The technicals are also pointing to lower crude prices, according to Baruch. Despite high prices for 2016, oil has moved relatively sideways all month and broke below an uptrend line. He sees further resistance at its 200-day moving average, near $42.80 per barrel. If oil fails to break above that average and instead falls below the 100-day moving average, “you're going to start to see a lot of selling that comes from there,” Baruch predicted.

To add insult to injury, crude’s relative strength index (RSI), which measures a contract’s up days versus its down days, is near an elevated reading of 70.

“This is an overbought technical that says the market is going to have to retreat,” Baruch said.

“There's a good 15% to 20% move down from here once this exuberance from the weaker dollar gets moved aside,” he added. “If the market gets below some of these levels around $37 to $36 in the May contract, you're going to see panic selling that brings this thing back down to $32. So that's what we're looking at, depending how it plays out over the next week or two.”