Worries that the delta variant of COVID-19 is pushing the world back into lockdown battered major energy stocks and indexes July 19, with many off 4% or more by midday, according to S&P Global Market Intelligence.

Not helping was the OPEC-plus decision to add more crude oil supply to the market, analysts said.

"It's the worst day for energy since last September," Mizuho Securities USA LLC's executive director for energy futures, Robert Yawger, said as the markets began to close. "OPEC blew the call," with the announcement of 400,000 barrels per day of additional production headed to the markets. "They thought the market would drink the Kool-Aid, but demand is going south" with a possible rebound in COVID-19 infections, Yawger said.

The upstream oil and gas sector took the biggest hits on the market, with oil and gas producer Marathon Oil Corp.'s share off nearly 7% by midafternoon and the broader S&P Oil and Gas Exploration & Production Index off over 5%. The midstream and utilities sectors, less exposed to oil and natural gas prices than the upstream sector, still saw losses with pipeline giant The Williams Cos. Inc. off almost 3.5% and Plains All American Pipeline LP off more than 4%.

The broader S&P 500 was down about 2% by midafternoon.

"The more problematic issue for the oil market is the spread of the delta variant," Raymond James & Associates oil, gas and renewables analyst Pavel Molchanov said in a July 19 email. "It is an underappreciated fact that the number of people in lockdown around the world is higher today than it was in January!"

Molchanov's remark echoes the bleak tone Raymond James took in a July 6 note to clients. "From Johannesburg to Jakarta, and from Lisbon to Moscow — the pandemic and its economic impact are actually looking worse, due to the relentless spread of the delta variant and its especially infectious cousin delta-plus," Raymond James wrote. "A tougher reality, in varying degrees, is fact of life for more people today than at the beginning of 2021, which is very counterintuitive — and, to be clear, this includes numerous major economies."

In the U.S., the snapback from the previous months' optimism has been quick, Height Securities LLC Director of Research Ben Salisbury told clients July 19. "Favorable U.S. COVID-19 trends have reversed with average daily infections bouncing from fewer than 12k/day to more than 31k/day," Salisbury said. "Shots administered have plummeted to 0.55MM/day 85% below the 3.4MM April peak."

Still, with the energy sector set to release second-quarter results, Tortoise Capital Advisors LLC Managing Director Rob Thummel expects shares to rebound on positive earnings news.

"The potential for the delta variant to slow the pace of the global economic recovery is impacting all recovery stocks today including energy stocks," Thummel said. "In the coming days and weeks ahead, energy stocks are expected to report continued capital discipline that results in higher free cash flow yields relative to the other sectors in the market."