
The on-loan Burnley winger ran the full length of the pitch to fire in the opener in what will go down as one of the goals of the season.
The winger had a chance early on when Derry Murkin found him with a low cross inside the area, but the winger's shot was blocked.
At the other end, Lewis Travis had to be alert to snuff out the threat posed by Stan Mills after he had brushed aside Banel in a counter-attack from a corner.
It seemed as though Oxford's plan was to put everybody behind the ball in a bid to frustrate John Eustace's side but that went out of the window in the 22nd minute as Derby took the lead with a stunning solo goal.
After an Oxford throw was cleared, Banel nipped to win possession on the edge of the box, skipped past a challenge and then surged downfield.
Brereton Diaz was screaming for the pass, but as Banel entered the Oxford half, he only had one thing on his mind as he cut inside on to his right foot after running 80 yards and smashed a wonderful finish into the bottom corner.
After the break, Sam Szmodics saw a shot deflected over the bar before the on-loan Ipswich forward made a super tackle to deny Myles Peart-Harris who had run through on goal.
Both sides traded minor blows after that miss as Derby secured all three points to keep up the pressure on the top six as Dion Sanderson and Derry Murkin looked to have picked up injuries.
Here are all the talking points....
It was not a spellbinding Derby performance by any stretch of the imagination but at this stage of the season, that doesn't really matter.
What was important was a result that kept the pressure on the sides above them in the chase for the top six and in that respect, Derby put a large tick next to that objective.
As you would expect, given their travails at the bottom of the table, Oxford were obdurate opposition underpinned by a 5-4-1 formation that formed a large yellow wall.
In the end, it took a stroke of individual genius to break the deadlock, provided by Jaydon Banel's majestic solo effort in the first half.
A bonafide goal of the season contender, there are professional dancers who would have admired how the on-loan Burnley winger swerved and shook his hips to fire in the opener following an 80-yard run.
There were some nervy moments, but that said, it did feel as if Derby had another gear to go to if required.
And so, with Hull dropping points against Birmingham, the door remains ajar to the play-offs even if the gap remains wafer-thin.
They are everybody's outsiders, but they're refusing to give up the fight. They will certainly need more of the same at Norwich on Tuesday night.
Asked after the game whether conversations had taken place with any of the loan players about returning next season, John Eustace could not say too much, but the smile said it all.
Derby have the nucleus of a very good team that has been underpinned by some excellent loan signings such as David Ozoh, Ben Brereton Diaz, Jaydon Banel, Sam Szmodics and Bobby Clark.
There's no doubt that Eustace would love to keep as many of them as possible and then add to the other areas that need addressing this summer, particularly in the wide positions.
Clearly, Derby have exceeded everybody's expectations this season and the big question is, if they finish outside of the play-offs, how do they then bridge that gap?
If they can lure the majority of their loan signings back to Pride Park, then with another couple of quality additions to follow on top of that, it would be a huge step in the right direction.
"Obviously I've spoken to all the players," Eustace said. "They love playing for Derby, they love being here.
"From that point of view, I think they'd all love to stay but everything else is out of my hands."
A fascinating summer awaits.
Jacob Widell Zetterstrom's return was most welcome after what has undoubtedly been a difficult few months.
The aftermath of a virus had kept the goalkeeper sidelined since the draw against West Brom and Eustace said after the game there was a point when he didn't think the Sweden international would play again this season.
But Zetterstrom is back just in time for the World Cup and it would have been a travesty, particularly after Patrick Agyemang's injury, had another player missed out on this summer's tournament.
There is a very good chance that Zetterstrom will be on the plane particularly as Viktor Johansson, who had been Sweden's number one, is still sidelined through injury.
But from a black and white perspective it was just good to see him back with a smile on his face. He even led a rendition of the bounce at full-time which made for one of the Kodak moments of the afternoon.
There has been considerable debate about the quality of refereeing in the Championship this season as well as talk about introducing VAR.
Derby are not the only team to have suffered at the hands of some questionable officiating, more of which was demonstrated courtesy of Sam Allison.
His worst offence came in the first half when he gave Oxford a free-kick when Sam Long grabbed Carlton Morris who was about to contest a header.
Video of the incident showed Long was not even looking at the ball and was only interested in stopping Morris who then tumbled to the ground as he tried to fend him off.
Incredibly, the decision went against him, and when referees are making straightforward errors such as this, then what chance do you have?
Referees have a tough job in a game that is becoming too quick for them. But that said, decisions like this do them no favours at all.