(Adds U.S. market open, byline; changes dateline; previousLONDON)
* Venezuela crisis, Iran nuclear pact drive oil prices
* Dollar rallies to 2018 high as euro dips below $1.19
* Nestle deal with Starbucks, energy stocks lift equities
By Herbert Lash
NEW YORK, May 7 (Reuters) - The dollar rose to fresh 2018highs on Monday while oil prices surged to their highest sincelate 2014, driven by declining Venezuelan crude production andworries the Unites States could re-impose sanctions on Iran.
The crude surge lifted energy stocks in Europe and on WallStreet, with European shares supported by strong results andgains in Nestle after the Swiss company agreed to pay$7.15 billion to Starbucks in a global coffee alliance.
The euro broke below $1.19 for the first time this year onweaker-than-expected German industrial orders and declining eurozone investor sentiment.
Investors increased bets that rising U.S. interest rateswould continue to boost the dollar, while traders unwound theirbearish positions on the greenback.
An index that tracks the dollar against a basket of leadingcurrencies climbed to 92.974, its highest since December.The index was last up 0.18 percent at 92.729.
"The general view right now is that the dollar is probablygoing to continue to move a bit higher against the euro inparticular, maybe against the yen as well," said Larry Hatheway,chief economist at GAM Investment Solutions.
The euro could slip to 117.50 or even 115 as a supportlevel, Hatheway said, as the Federal Reserve tightens monetarypolicy and the European economy trends weaker, he said.
"There's a general appreciation the Fed is going to move atleast twice again this year and the consensus is shifting towardthree more moves this year."
The euro slid 0.27 percent to $1.1926, while theJapanese yen was little changed at 109.09 per dollar.
Venezuelan oil exports came under threat after U.S. oilmajor ConocoPhillips moved to take Caribbean assets ofstate-run PDVSA to enforce a $2 billion arbitration award, threesources told Reuters.
The move could further crimp PDVSA's declining oil outputand exports.
Widespread expectations that U.S. President Donald Trumpwill withdraw from the Iranian nuclear pact also weighed oncrude prices.
U.S. crude rose 73 cents to $70.45 a barrel, whileBrent gained $1.22 to $76.09.
Nestle rose 1.6 percent after it gained the rightsto market Starbucks products around the world outside of theU.S. company's coffee shops.
Nestle was the biggest contributor to the 0.61 percentadvance in the pan-European FTSEurofirst 300 index ofleading regional shares. Oil giants Royal Dutch Shelland Total also were among the biggest contributors.
On Wall Street, the S&P energy index was the biggestgainer, rising more than 2 percent, among the 11 major sectors.
The Dow Jones Industrial Average rose 163.91 points,or 0.68 percent, to 24,426.42, the S&P 500 gained 13.78points, or 0.52 percent, to 2,677.2 and the Nasdaq Compositeadded 65.01 points, or 0.9 percent, to 7,274.62.
Euro zone government bond yields slid as the unexpected fallin German industrial output was seen as encouraging the EuropeanCentral Bank to prolong an unwinding of stimulus.
The yield on the benchmark 10-year German bundfell to 0.531 percent, while yields on U.S. benchmark 10-yearTreasury notes rose to 2.9572 percent.
(Reporting by Herbert Lash; Editing by Dan Grebler)