The Saddlers travel to the Kassam Stadium where they will take on a U’s outfit currently sat second bottom in the table.
Karl Robinson’s men have lost five, drawn two and won just one of their eight league matches so far.
But they were tipped to be much higher up the table before a ball had been kicked.
And Keates – whose side lost to Doncaster last weekend – believes they are a team that cannot be underestimated.
“I think, when you look at the league table, their position is a bit false,” the boss said. “They won’t be there at the end of the season.
“We have had them watched in their last few games and they are a very, very good side.
“At Wycombe last weekend, it ended 0-0 but they played some really good football.
“It’s going to be difficult game for us and we need to show a reaction because we were disappointed with how we performed against Doncaster.
“That disappointment is something we have got to channel. But all being well we will go to Oxford and put in a performance that will get us three points.”
Walsall’s display against Doncaster wasn’t helped by a handful of players suffering with a stomach bug – with Isaiah Osbourne needing to be subbed off in the second half.
But Keates says his squad is working it’s way back to full strength.
“There were one or two who were still a little bit wary on Monday,” the boss continued. “They were still a bit weak so it’s just been a case of helping them progress back to the levels they were at.
“But overall everyone is fine – other than their pride, that was the only knock they picked up against Doncaster.”
Meanwhile, Keates said Walsall will look to send youngster Dan Vann back out on loan after the defender saw his temporary spell at Matlock Town end early after they appointed a new manager.
“Dan went to Matlock and played a few games but it was only ever going to be short-term thing because they had a lot of injuries,” the boss added. “But there has been a managerial change there and the new man has brought in four players already.
“I don’t see any reason why Dan needs to be driving up there and not being involved. All being well we will get him out on loan elsewhere.
“But playing those few games will have helped him.”