The Australian share market looks poised to fall at the open after global markets lost ground overnight, but energy stocks could be set to rally as oil prices surge to four-year highs.
Global benchmark Brent crude hit its highest level since 2014, after oil cartel OPEC and other major producers decided not to increase oil output at a meeting over the weekend.
CommSec chief economist Craig James said he expected oil prices to continue to climb before they fell.
"Certainly Saudi Arabia and Russia don't want the oil price to be too high, because if that happens it can lead to slower global growth and therefore less demand," Mr James told the ABC.
"Supply has been constrained, demand is still very, very strong. I think there will be a choke point but we may have to see the oil price rise a little bit further before we start to see some action from the major producers."
Despite a rally in the energy sector, stocks on Wall Street slid, as tariffs on $US200 billion worth of Chinese goods took effect, along with Beijing's retaliatory tariffs on US goods.
Shares in Apple, which was spared from the tariffs, rose 1.5 per cent and the tech-heavy Nasdaq index edged higher.
Speculation US Deputy Attorney-General Rod Rosenstein will quit also added to investor jitters.
Mr Rosenstein will meet with US President Donald Trump on Thursday, and any termination or resignation would affect special counsel Robert Mueller's Russia probe.
The trade tensions pushed markets across Europe lower, with the German, French and UK indexes all declining.
The Australian dollar was also hit by the trade concerns, losing ground against the greenback.
"The ongoing US China trade tensions have seen risk assets begin the new week with a wary tone and as a result the Australian dollar and New Zealand dollar are among the G10 underperformers," NAB strategist Rodrigo Catril said.
"For now the Australian dollar seems unable to sustain moves above 73 cents."
The Australian share market looks set to follow the global downtrend, with ASX SPI 200 futures lower, pointing to a fall at the start of trade.
