Seeded fourth in the tournament, the Israeli started as the firm favourite after beating top seed Yibing Wu of China in the semi final.
Oliel slipped behind 0-2 at the start of the match but recovered well to take the first set 6-4.
The second set was also evenly balanced with the Hungarian eventually winning 3-6.
But in the final set Piros was by far the stronger player with Oliel making many unforced errors to lose 2-6.
In light of Oliel's overall performance in Melbourne, together with his coaches at the David Squad, UK philanthropist David Coffer's Ra'anana tennis academy, it has been decided that the 17-year-old will play both selected adult and junior tournaments in 2017, in preparation for turning professional next year.
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