Oil slipped for a second day as European confidence in the economic outlook fell to a two-year low and the euro declined.

Futures decreased as much as 0.9 percent as the common currency dropped to the lowest level versus the dollar since September 2010. Crude surged to the highest price in almost eight months this week as Iran threatened to block the Strait of Hormuz and European ministers discussed an embargo on oil imports from the country.

Crude oil for February delivery fell 75 cents, or 0.7 percent, to $101.06 a barrel at 10:30 a.m. on the New York Mercantile Exchange. The contract is headed for a 2.3 percent gain this week. Prices advanced 8.2 percent in 2011.

Brent oil for February settlement declined 46 cents, or 0.4 percent, to $112.28 a barrel on the London-based ICE Futures Europe exchange.