Oil prices fell more than $1 on Tuesday, extending the previous day’s slide, as the collapse of Silicon Valley Bank rattled equities markets and sparked fear about a fresh financial crisis.

Brent crude futures were down 87 cents, or 1.1%, at $79.90 a barrel at 0345 GMT. US West Texas Intermediate crude futures (WTI) dropped 85 cents, or 1.1%, to $73.93 a barrel. On Monday, Brent fell to its lowest since early January, while WTI dropped to its lowest since December.

The sudden shutdown of SVB Financial triggered concerns about risks to other banks resulting from the US Federal Reserve’s sharp interest rate hikes over the last year. It also spurred speculation on whether the central bank might slow the pace of its monetary tightening.

US authorities launched emergency measures on Sunday to shore up confidence in the banking system after fears of contagion from the failure of Silicon Valley Bank led to a sell-off in US assets at the end of last week and state regulators closed New York-based Signature Bank on Sunday.

Beyond the Silicon Valley Bank shockwaves, oil prices were also under pressure due to signs of a weaker-than-expected economic recovery in China, despite the lifting of its strict Covid-19 restrictions, said Leon Li, an analyst at CMC Markets.

“The market had previously expected a strong recovery of the Chinese economy, but the latest February inflation rate was only 1% year-on-year, reflecting the current deflationary state of the Chinese economy and weak demand,” he said.

China’s statistics bureau released data last week showing consumer inflation in the world’s second largest economy slowed to the lowest rate in a year in February as shoppers remained cautious even after pandemic curbs were lifted in late 2022.

In US supply news, the American Petroleum Institute is expected to release industry data on US oil inventories on Tuesday.

Six analysts polled by Reuters estimated on average that crude inventories rose by about 600,000 barrels in the week to March 10.