The benchmark S&P/ASX200 index had dropped 38.7 points, or 0.47 per cent, to 8102.7, while the broader All Ordinaries had fallen 31.5 points, or 0.38 per cent, to 8330.4 during early trading.
The local bourse diverged from Wall St, which rallied overnight after US president Donald Trump announced a one-month pause on tariffs for north America's deeply interconnected auto sector.
The was no such relief for Canadian and Mexican oil imports and orders from US refineries have slipped, lowering demand as OPEC+ prepares to boost production and sending Brent crude below $US70 per barrel for the first time since October 2024.
Brent futures dropped to $US68.25, their lowest level since December 2021.
Only one of the local index's 11 sectors were trading higher and energy stocks were leading the losses and trading more than 2 per cent lower in early trading.
Consumer staples stocks were in the green, but only just, up 0.1 per cent.
Oil and gas giant Woodside was the worst performer in the top 200, down 4.4 per cent to $23.07 per share in early trading.
With iron ore futures holding around $US100, mining giants BHP and Rio Tinto were both in the red, with BHP 0.3 per cent lower and Rio down 1.3 per cent, after the Royal Court of Jersey rubber-stamped its $US6.7 billion acquisition of Arcadium Lithium.
The big four banks were mostly flat on Thursday morning, except for CBA which gave up 0.3 per cent to trade at $155.91 after going ex-dividend.
Utilities stocks were also bleeding, with APA Group and AGL both down more than 1.5 per cent, with the traditionally defensive sector down about 4 per cent since the end of February.
The Australian dollar has rallied against the Greenback amid fear of weak growth in the US, and was buying 63.35 US cents, up from 62.54 US cents on Wednesday afternoon.
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