Oil held its losses amid concerns about China’s economic outlook and the cautious mood in financial markets triggered by the banking crisis. 

U.S. crude was below $76 a barrel after falling 1.5 percent on Monday. China’s recovery continues to be erratic, with the latest data pointing to a contraction in manufacturing. Yet tourism and travel activity surged on the first day of the nation’s five-day Labor Day holiday, likely marking increased fuel demand at the world’s largest importer of crude oil. 

In the U.S., JPMorgan Chase & Co. has agreed to acquire First Republic, the latest bank to go bankrupt. While the deal helps stabilize the financial system, there are still concerns about the fate of other weak banks in the country. 

Oil has lost more than 5 percent this year despite a move by the Organization of the Petroleum Exporting Countries and its allies to cut supply this week. A darkening economic outlook led to losses as central banks, including the Fed, raised interest rates. The Fed is expected to potentially make the last increase in the current cycle this week.