Oil Falls From Five-Month High on Signs Europe Crisis Spreading

Oil fell from a five-month high in New York as Spain’s borrowing costs surged, heightening concern that Europe’s debt crisis is spreading and will hurt demand.

Futures fell as much as 2.5 percent after Spain sold 3.56 billion euros ($4.8 billion) of a new 10-year benchmark bond at an average yield of almost 7 percent, the most since the euro’s creation. Oil surged yesterday after the Energy Department said U.S. crude stockpiles declined for a second week and Enbridge Inc. said it will reverse the direction of the Seaway pipeline, adding an outlet to transport from the central U.S. and Canada to the coast of the Gulf of Mexico.