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By Bloomberg

Oil fell for a fifth day as investors weighed the prospects of Iran increasing crude exports in an oversupplied market.

Futures dropped as much as 0.7 percent in New York. U.S. and European diplomats meeting in Vienna said a path to a comprehensive nuclear accord with Iran can be reached within days as Tuesday’s deadline for an agreement is set to be missed. A measure of volatility in crude trading rose the most since December amid concern financial turmoil in Greece will prompt its exit from the euro area.

Oil is headed for its first monthly decline since March as the Greek debt crisis prompted investors to avoid risky assets, while signs of a global glut persist. Iran, the fifth-largest producer of the Organization of Petroleum Exporting Countries, has estimated it can double exports from about 1 million barrels a day within six months if international sanctions are lifted.

“Global supply is still high so if we see extra oil from Iran, it could be a problem,” David Lennox, an analyst at Fat Prophets in Sydney, said by phone. “We’ve been quite positive on the price but it could start to look a little bleak, especially if Europe starts to contract again if there’s a contagion affect out of Greece.”

West Texas Intermediate for August delivery lost as much as 39 cents to $57.94 a barrel in electronic trading on the New York Mercantile Exchange and was at $58.17 at 12:32 p.m. Singapore time. The contract decreased $1.30 to $58.33 on Monday. Total volume was about 55 percent below the 100-day average. Prices are down 3.6 percent this month.

The U.S. benchmark crude has advanced 22 percent since the end of March, poised for the first quarterly gain in a year, and is up 9.2 percent in 2015.

Nuclear Discussions

Brent for August settlement slid as much as 30 cents, or 0.5 percent, to $61.71 a barrel on the London-based ICE Futures Europe exchange. Prices have dropped 5.6 percent in June, headed for a second monthly decline. The European marker grade traded at a premium of $3.76 to WTI.

Iran has called for all sanctions, which have reduced its oil exports by half since 2012 and cut it off from the global financial system, to be lifted once a nuclear deal is agreed. The U.S. and its allies want the curbs to be removed in phases as Iran is shown to be implementing any agreement.

“We have made some progress, but still it is not the end of a process,” French Foreign Minister Laurent Fabius said in New York on Monday, before his planned return to the talks. Iran’s top diplomat, Mohammad Javad Zarif, traveled to Tehran on Sunday and is expected to rejoin negotiations Tuesday.

Volatility Index

Also on Tuesday, Greece’s current bailout package will expire, with a $1.7 billion payment due to the International Monetary Fund. The government has imposed capital controls and shut banks, after Prime Minister Alexis Tsipras called for a July 5 referendum on the austerity measures demanded by creditors.

The Chicago Board Options Exchange Crude Oil Volatility Index climbed 16 percent to 33.64 on Monday. The gauge of hedging costs on the U.S. Oil Fund, the biggest exchange-traded fund tracking WTI futures, rebounded from the lowest reading since October.

U.S. crude inventories probably shrank by 2.5 million barrels through June 26, according to the median projection in a Bloomberg survey of nine analysts before an Energy Information Administration report Wednesday. While supplies have decreased the previous eight weeks to 463 million barrels, they’re still 84 million above the five-year average for this time of the year.

Crude stockpiles in Europe’s trading hub expanded to the highest level in data compiled by Genscape Inc. since February 2013, adding to signs that storage space is becoming constrained. Supplies in the Amsterdam, Rotterdam and Antwerp area increased to 60.6 million barrels in the week ended June 19, said the company, which monitors inventories.