Negotiations between the US and Iran cast doubt on the oil supply.

Oil prices fell 1% on Tuesday, amid investor concerns about oversupply after Iranian and U.S. delegations made progress in their talks and expectations that OPEC+ will decide to increase production at a meeting this week.

Brent crude futures closed down 65 cents, or 1%, at $64.09 a barrel, while U.S. West Texas Intermediate crude fell 64 cents, or 1.04%, to $60.89 a barrel.

The Mexican export mix, meanwhile, fell 1.21% to $57.28 a barrel.

The Organization of the Petroleum Exporting Countries and its allies (OPEC+) is not expected to change policy at Wednesday's meeting; however, a further accelerated oil production increase for July is likely to be agreed upon at another meeting on Saturday, three OPEC delegates told Reuters.

Meanwhile, Iranian and US delegations concluded a fifth round of talks in Rome last week. Although there were signs of limited progress, many points of disagreement remained difficult to overcome, most notably the issue of Iran's uranium enrichment.

“OPEC+ also meets next week and is likely to agree to further production increases, which, if present, would be a significant near-term drag on crude, especially if Iran adds barrels in the potential deal with the United States,” said Dennis Kissler, senior vice president of trading at BOK Financial.

Sanctions will continue

If the US-Iran nuclear talks fail, sanctions against Iran could continue, limiting Iranian oil supplies, while any resolution could add Iranian supply to the market.

Also on the supply side, U.S. crude oil stockpiles likely increased by about 500,000 barrels last week, according to a preliminary Reuters survey on Tuesday.

Supporting prices, US President Donald Trump's decision to extend trade talks with the European Union until July 9 eased immediate fears of tariffs that could suppress fuel demand.

UBS analyst Giovanni Staunovo said the easing of trade concerns was supportive and that price upside remains limited until it becomes clear what OPEC+ will decide on Saturday.