US benchmark NYMEX crude futures have seen a steady and steep decline in the last couple of months, with prices dropping as much as 2.2% overnight to close at $US78.78 a barrel, the lowest finish for the front month contract since end of June 2012.
Meanwhile, global benchmark ICE Futures-traded Brent also retreated almost 2% to trade at $84.28/bbl.
Many market analysts attribute the bearish spiral largely to macro-economic indicators including a greenback rally underpinned by higher than expected rise in the US manufacturing index, and China's official monthly PMI for October dropping to a five-month low over the weekend.
While the oil market itself might be sending out signals of doom and global gloom, recent rally in the very large crude carrier (VLCC) market appears to be bucking the trend and potentially signalling an oil market revival.
Shipping industry data shows a 9-month high in VLCC chartering activity, which has pushed up earnings for the carriers to a daily average of $US53,720 ($A61,799), the highest level seen since last November.
Also, vessel movement from the Middle East registered a 40% increase in the last week of October and have gained more than two-thirds this year alone.
World Scale indices also show increase in charter rates across all size vessels with North Sea and Baltic VLCC voyages moving substantially. North Sea day rates were at WS102.5, while Baltic rates were quoted at WS85, up from WS72.5 earlier last week.
Many believe that the increase in tanker day rates is also largely due to China looking to take advantage of low prices and filling its strategic petroleum reserve.
Trade data shows that China bought around 40 cargoes in October alone totalling a reported 21 million barrels, its biggest purchases ever.
Earlier this year, when it was officially filling its SPR, one of the biggest bulk purchases was in April for a total of 16 cargoes, a sharp contrast to the country's summer average of about three spot cargoes a month.
China has steadily been building its SPR, with the aim of carrying 100-day forward reserves by 2020, which based on its current consumption would require 680 MMbbl. Earlier this year, its SPR was holding around 160MMbbl.
In fact, chartering fixtures show a 167% jump in VLCC voyages to China.
Yet, while China fills its SPR, upward pressure on crude could also come from a rather unlikely quarter - Asian refineries. While it stands to reason that refineries look for cheaper crude, many Asian refiners have already build up oil inventories, bought during high prices and are wary of a hit in product prices.
Analysts note that some Chinese refiners have been particularly active in the over-the-counter (OTC) physical oil market, pushing prices of local oil grades including Upper Zakum and Abu Dhabi crude, indicating that the market might actually turn a corner soon.
