He really is. His skin is changing from pink to the pre-fur colour of grayish-black as he develops more squirrel traits such as whiskers and a furry muzzle.
Here he is, just hanging out on my thumb.
And below, Oscar's baby-on-a-bearskin shot.
Sometimes, it's hard from photos to gauge his actual size. Below, a comparative shot of Oscar and a man's index finger.