May 7, 2018 / 12:28 PM / in 6 months

GLOBAL MARKETS-U.S. oil breaks through $70, dollar hits fresh 2018 high

(Updates with move in the US dollar)

* Venezuela crisis, Iran drive oil price surge

* Asian, European stocks mostly firmer, with London shut

* Dollar rallies to fresh 2018 high; euro below $1.19

* Graphic: World FX rates in 2018 tmsnrt.rs/2egbfVh

By Dhara Ranasinghe and Tommy Wilkes

LONDON, May 7 (Reuters) - Oil prices hit their highest since late 2014 on Monday, driven by a deepening economic crisis in Venezuela and worries that the Unites States could re-impose sanctions on Iran, while stocks firmed and the dollar surged to another 2018 high.

With trading thinned by a holiday closure in London, European shares opened higher, boosted by energy stocks as well as encouraging earnings updates.

“It’s a positive environment for the equity markets,” said Niels Christensen, chief analyst at Nordea in Copenhagen.

Nestle shares also gained after the Swiss-based food firm agreed to pay Starbucks $7.15 billion in cash for the rights to sell the U.S. coffee chain’s products around the world.

Most Asian markets also rose after Friday’s tame reading on U.S. wage growth lessened the chances of a pick-up in the pace of interest rate hikes by the Federal Reserve. Gains were capped by Sino-U.S. trade tensions.

U.S. equity futures pointed to a positive open for Wall Street.

The day’s eye-catching moves came in energy markets.

U.S. crude oil prices rose more than 70 cents, or 1.1 percent, pushing above $70 a barrel for the first time since November 2014 as the crisis in OPEC member state Venezuela threatened to further crimp its production and exports.

Brent crude oil futures gained to $75.64 per barrel at 1210 GMT, up 1.14 percent and having also touched their highest since November 2014.

Also driving oil prices higher was the May 12 deadline set by U.S. President Donald Trump for Europeans to “fix” the deal with Iran over its nuclear programme. If they do not, Trump has said he would refuse to extend U.S. sanctions relief for the oil-producing Islamic Republic.

Germany and France on Monday vowed to stand by the 2015 nuclear deal between Iran and world powers even if the United States pulls out.

The European oil and gas share index was up 0.5 percent.

EURO AT 2018 LOW

The dollar rose to a new 2018 peak, extending its 2-1/2 week-long rally as investors unwound short positions against the currency and bet that the relative strength of the U.S. economy would feed through to a stronger greenback.

Against a basket of currencies the dollar, which has enjoyed a sudden reversal in fortunes as investors bet on more Fed rate hikes and a slower pace of tightening in the euro zone, rose 0.4 percent to 92.968, having shrugged off Friday’s weaker-than-expected jobs report.

The euro slid to below $1.19 versus the dollar,, down half a percent on the day and its weakest since Dec. 28.

In data from the euro zone’s largest economy Germany, industrial orders unexpectedly dropped for the third month running in March, suggesting factories there are shifting into lower gear.

The week ahead includes readings on the health of the Chinese economy and, U.S. inflation, and a Bank of England monetary policy meeting.

“Looking at the U.S. economic data, everything is looking quite positive. No one expects higher interest rates to be a brake on economic growth,” said Christensen.

The soft German data supported euro zone government bond markets as investors continued to bet on caution from the European Central Bank.

“A lot has been repriced in terms of the ECB so the outlook for bonds is a bit more mixed,” said Commerzbank rates strategist Rainer Guntermann.

Reporting by Dhara Ranasinghe and Tommy Wilkes; additional reporting by Danilo Masoni in MILAN; editing by John Stonestreet and Alexander Smith

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