The International Energy Agency said today, Thursday, that the spike in oil demand has abruptly reversed and is moving slower due to the spread of the mutated Covid-19 Delta strain. 

"Growth for the second half of 2021 has been downgraded more sharply, as new COVID-19 restrictions imposed in several major oil-consuming countries, particularly in Asia, look set to reduce mobility and oil use," the Paris-based IEA said.

"We now estimate that demand fell in July as the rapid spread of the COVID-19 Delta variant undermined deliveries in China, Indonesia, and other parts of Asia," the Agency said in its monthly oil report.

The Agency also set demand at 120,000 barrels per day last month and expected growth in the second half of the year to be half a million barrels per day, lower than its estimate issued last month, noting that some of the changes are due to changes in data. 

Moreover, the Agency added that the production agreement reached by the OPEC+ alliance last month will restore balance to the market in the short term, pointing out that the market may "tend again to record a surplus in 2022 if OPEC continues to halt the cuts and the producers who did not participate in the agreement (production) in response boost the supplies."