Place the loop on the table and try to form a circle with it.
Fill a pie plate with water and place the loop on the surface of the water.
Place a drop of dish soap in the middle of the loop and watch.
The loop forms a circle on its own*!
The soap lessens the surface tension in the middle of the loop, but the tension outisde the loop are still at full strength and pull on the thread from all directions.
*You have to be watching carefully to see the circle as it's a fleeting thing that can't be repeated without dumping the water, scrubbing the pan and starting again (once the soap breaks the surface tension, you can't put it back together again). You have to act even faster if you want to get a picture of the perfect circle...
