The S&P/ASX 200 faded into the afternoon as oil prices rolled over and the iron ore rout intensified.
Oil has been trying to stabilise around US$110 after a sharp 1-day selloff from US$120 last Friday. Prices resumed selling around 10:00 am AEST, now -4% around US$105.
Oil is in a volatile place after last Friday, where traders are weighing up the prospects of an economic slowdown against tight supplies.
Chinese customs reported record oil imports for May last Friday, suggesting demand remains as strong as ever. However, Russian seaborne crude exports have remained unchanged in the face of sanctions, sitting around post-pandemic highs in the first half of June as China and India snap up discounted offers, according to S&P Global Platts.
"The oil market remains too tight over the short-term and rising expectations over tougher sanctions with Russian crude should keep demand especially strong here," said Oanda senior market analyst, Ed Moya.
"WTI crude should easily be supported above the USD 100 level throughout the summer, which means any dips will be bought into," said Moya.
The iron ore rout continues to deepen, with futures down -4.3% on China's Dalian Commodity Exchange (DCE).
DCE prices have only been positive just 1 out of the last 10 sessions.
While there isn't exactly any new concerning news for iron ore, the outlook remains weak amid China's demand recovery worries and property sector risks.
Finance Writer & Social Media
Get the latest news and media direct to your inbox