Oil steady after closing below $40 for first time since June

Oil steadied after its biggest one-day loss in more than two months as growing doubts over the strength of the global demand recovery along with continued weakness in stocks soured market sentiment.

Futures in London were little changed after dropping 5.3% on Tuesday to settle below $40 a barrel for the first time since June 15. Asia’s stalling demand recovery, the end of the US summer-driving season and increased supply from the OPEC+ alliance all point to a grim short-term outlook for oil prices.

Crude has also been hurt by worsening US-China relations and a retreat in global stocks, partially driven by concerns a Covid-19 vaccine may be delayed. The benchmark S&P 500 Index has fallen 7% over the last three sessions.