(Bloomberg) -- Oil held the biggest drop in more than two weeks as the US said Israel had accepted a cease-fire proposal to halt the war in Gaza, potentially easing supply risks just as concerns about the outlook for demand mount.

US benchmark West Texas Intermediate held above $74 a barrel after shedding 3% on Monday, while Brent crude closed below $78. Secretary of State Antony Blinken said the next step was for Hamas to agree to the proposal aimed at de-escalating the 10-month old conflict in the Middle East.

On the demand side, meanwhile, China’s economic malaise continues to remain top of mind for traders, after recent data showed shrinking factory activity and a decline in oil demand. The nation is the world’s largest importer.

Crude has given up most of its year-to date gains as the lift from OPEC+ supply curbs and expectations for lower US interest rates have been countered by the challenging outlook in China. The Organization of the Petroleum Exporting Countries has said that it may loosen output curbs in the final quarter, although that plan could change if conditions shift.

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