Oil dropped from the highest level in a week as concern about Europe’s debt crisis outweighed optimism spurred by elections in Greece.

Futures fell as much as 0.4 percent in New York after the Spanish 10-year bond yield rose to a euro-era record of 7.13 percent. Greece’s New Democracy and Pasok parties won enough seats to form a majority in the 300-member parliament, according to an official projection. The death of Crown Prince Nayef bin Abdulaziz Al Saud in Saudi Arabia, the world’s largest oil exporter, raised the issue of succession for the second time in less than a year.

“Investors should remain cautious until Greece forms a government that could stabilize the markets for the short-medium term,” Myrto Sokou, an analyst at Sucden Financial Ltd. in London, said by e-mail.

Oil for July delivery dropped as much as 37 cents to $83.66 a barrel in electronic trading on the New York Mercantile Exchange and was at $83.79 at 9:49 a.m. London time. The contract traded earlier at as much as $85.60 a barrel.

Brent oil for August settlement fell 10 cents, or 0.1 percent, to $97.51 a barrel on the London-based ICE Futures Europe exchange. The front-month European benchmark contract was at a premium to West Texas Intermediate of $13.42, up from $13.28 on June 15.

Oil in New York has technical support along its 200-week moving average, around $80.65 a barrel today. Futures halted last week’s decline near that indicator. Buy orders tend to be clustered close to chart-support levels.

Saudi Successor

In Saudi Arabia, Nayef’s death leaves Prince Salman bin Abdulaziz as a leading contender for the crown prince position, as the kingdom grapples with high youth unemployment and security issues, including the threat of al-Qaeda militants and unprecedented political change in the Middle East.

The kingdom will make sure there is enough supply in the global crude market, Oil Minister Ali al-Naimi said in a June 15 interview, a day after the Organization of Petroleum Exporting Countries kept its output ceiling unchanged.

Saudi Arabia, OPEC’s largest oil producer, pumped 9.9 million barrels a day last month, according to data compiled by Bloomberg. Output from Iran, the second biggest, was 3.2 million a day, the data shows.

“Supplies remain abundant and we have yet to see any evidence that OPEC is reducing supplies or the EU crude embargo against Iran is significantly curbing shipments,” Andrey Kryuchenkov, an analyst at VTB Capital in London said. Brent crude has resistance at $102 and support at $96, he said.

Iran Talks

Diplomats began a two-day round of discussions in Moscow about Iran’s atomic program that officials say probably won’t yield enough progress to end the threat of military strikes.

Chinese, French, German, Russian, British and U.S. negotiators convened with their Iranian counterparts behind tight security at a hotel near Russia’s Foreign Ministry. The so-called P5+1 group will continue to seek Iranian acquiescence to suspend production of uranium enriched to 20 percent while the Islamic republic presses for relief from sanctions set to tighten from July 1, when a European Union oil embargo kicks in.

Money managers cut bullish oil wagers for a sixth week ahead of the Greek elections. Net-long positions fell by 2,541, or 1.9 percent, to 130,508 futures and options combined in the seven days ended June 12, according to data from the Commodity Futures Trading Commission’s Commitment of Traders Report.