MW Crude-oil futures haven't been this overbought since 1990. That doesn't mean the rally is over.

By Tomi Kilgore

The last time the 'Relative Strength Index' was as high as it is now, crude prices surged more than 35% before peaking two months later

A momentum indicator for a crude-oil futures chart has soared to its highest level in 36 years, but, as the Wall Street saying goes, overbought doesn't mean over.

The pace of the run-up in crude-oil prices has reached historic extremes, but, if the past is used as a guide, that doesn't mean the rally is set to run out of steam.

Continuous crude-oil futures (CL00) were up 12% in afternoon trading Friday and were heading for a record weekly gain of more than 35%, as the Iran conflict fuels growing fears of a supply crash.

With that rally, the widely followed Relative Strength Index, a momentum indicator introduced in the late 1970s that measures the magnitude of gains over a specific time period against the magnitude of losses, is now suggesting crude futures are wildly overbought.

RSI, which oscillates between 10 and 100, tends to rise when prices rise. Many chart watchers view a rise above 70 as indicating an overbought condition.

As of recent trades on Friday, RSI for crude futures had climbed to 88.94, a level that hasn't been seen since Aug. 7, 1990, which was just after Iraq invaded Kuwait.

Keep in mind that the term overbought can be a misnomer. What it means is that prices have rallied at a much faster pace than historical norms, which can make buyers nervous that a pullback is needed to allow bulls to catch their breath.

The last time crude's RSI rose above 70 was June 13, 2025, as Israel launched missile attacks against Iran. Prices peaked a week later, and RSI quickly fell back below 70, and stayed below that mark until this week.

There's also a technical school of thought that "overbought" is more of an ability than a condition, meaning that the ability to become overbought is a sign of underlying strength. (See Constance Brown's "Technical Analysis for the Trading Professional.")

On Aug. 7, 1990, RSI reached 91.22 as crude-oil prices rose to $28.31, according to FactSet data. There was brief pullback - one might call it a stabilization period - that led to RSI dipping below 70, but within two weeks prices were even higher.

And then from Aug. 7 crude prices soared another 37% within two months. When prices peaked on Oct. 11, RSI was just below 70.

So what past behavior is telling us is that there may be a brief pause or pullback in crude prices in the short term, but, barring a steep drop in momentum that puts a cap in RSI above 70, the rally could continue for a while.

As the Wall Street adage goes, overbought doesn't mean over.

-Tomi Kilgore

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March 06, 2026 15:45 ET (20:45 GMT)

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