Oil prices resumed their decline on Tuesday as Donald Trump urged Saudi Arabia and other major oil exporters not to cut production, weighing on FTSE 100 firms.
A barrel of Brent crude was trading 2.8% lower at 67.06 US dollars.
It came just a day after oil rallied as much as 2.2% after Saudi Arabia signalled a production cut.
But Mr Trump tweeted in opposition to the move, saying that oil prices should be lower based on supply.
The FTSE 100 avoided closing in the red by a whisker, gaining just 0.68 points, or 0.01%, to finish the day at 7,053.76.
The blue-chip index was also under pressure from a swiftly rising pound.
Sterling was up 0.77% against the euro to 1.154 and 1.4% against the dollar to 1.303, bolstered by more positive Brexit headlines and fresh labour market figures.
Vodafone led the FTSE risers as new boss Nick Read took aim at cutting operating costs by at least £1 billion by 2021.
He revealed 900 customer services jobs have been shed amid a drive towards automation, and signalled further cuts ahead.
Shares in Vodafone jumped by 11.24p, or 7.79%, to 155.6p.
Meanwhile, shares in Interserve hit a fresh 30-year low on concerns about the outsourcing company’s financial future.
The stock fell as much as 20% after BBC News reported that an Interserve shareholder doubted the company could survive as it potentially seeks to raise cash to shore up its finances.
But the stock recovered after the company issued a statement saying its strategy was on track, to close 0.82p, or 2.09%, lower at 38.5p.
Elsewhere, European markets were mixed as traders await Italy’s resubmission of its budget to the EU.
The biggest fallers on the FTSE 100 were British American Tobacco down 126p to 2,836.5p, Smurfit Kappa down 74p to 2,240p, BP down 14.6p to 513.5p, and Wood Group down 17.4p to 650.2p.