The 22-year-old was at Oxford on loan since January, impressing by scoring four goals in 16 games.
Now it appears the Oxford manager Karl Robinbson wants to sign him on loan for the entirety of the 2019-2020 season.
He spoke to the Oxford Mail and said: "We're still speaking to Jerome, so that's where we're at.
"I imagine we will have answers soon."
It is unclear if Watford are open to a loan or would prefer a permanent transfer of the 22-year-old who is not seen as a first team squad member.