* Energy shares top losers
* Woodside Petroleum's Q2 revenue disappoints
* Iron ore prices recede from record levels
By Rushil Dutta
July 18 (Reuters) - Australia shares eased on Thursday, tracking declines on Wall Street while the energy sector led losses due to softer oil prices and Woodside Petroleum's disappointing quarterly revenues.
The S&P/ASX 200 index was 0.3% lower at 6,655.30 by 0200 GMT. The benchmark rose 0.5% on Wednesday.
Oil prices entered their fourth straight day of decline after data showed U.S. stockpiles of products such as gasoline rising sharply last week.
That clobbered the energy sub-index, which was the biggest drag on the main board, losing 1.8%.
Shares of the energy sector's biggest constituent Woodside Petroleum slid to a six-week low after it reported a 32% decline in second-quarter revenue, missing analyst forecasts by a big margin.
Meanwhile, overall sentiment took a beating on renewed concerns over a lack of progress in the Sino-U.S. trade dispute as U.S. President Donald Trump renewed his threat to tax another $325 billion of Chinese goods on Tuesday.
The United States too could also face Chinese sanctions, following a World Trade Organization ruling on Tuesday, further souring trade talks between the world's two biggest economies.
"We are seeing noise again around the trade war that isn't really that much of a story but it does not inspire much optimism in the market," said Kyle Rodda, market analyst at IG Markets.
Shares of the country's top lenders sagged, losing between 0.1%-0.6% after credit rating firm Fitch cut its outlook for Westpac Banking Corp and Australia and New Zealand Banking Group to "negative" from "stable" on Wednesday.
Fitch cited greater capital requirements for its move, which comes after the Australian Prudential Regulation Authority (APRA) told three of the country's biggest banks last week to each set aside a further A$500 million ($350.50 million).
However, the ratings agency affirmed Westpac and ANZ's ratings at 'AA-'.
Aussie mining shares were flat as iron ore futures in China retreated from record levels after a rally in the steel-making ingredient took it to its highest level since 2013.
Shares of global miner Rio Tinto were 0.3% higher, while those of its larger rival BHP Group were off nearly 1% as softness in oil prices weighed. BHP has a significant exposure to oil, unlike Rio.
The world's no. 4 iron ore miner Fortescue fell 1.3%.
New Zealand's benchmark S&P/NZX 50 index advanced 0.3% to 10,685.30.
The domestic energy sector comprising refiners and petroleum distributors cheered lower oil prices. New Zealand Refining Company added 1%, while Z Energy Ltd gained 1.5%. Utilities advanced too.
Elsewhere, the local financial sector slid as NZ-listed shares of Westpac and ANZ fell over 1% each.
Additional reporting by Aditya Soni in Bengaluru Editing by Jacqueline Wong