(Adds close of U.S. market)
* Venezuela crisis, Iran nuclear pact drive oil priceshigher
* 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 climbed to their highest sincelate 2014, driven by declining Venezuelan crude production andworries the United 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 0.23 percent at 92.782.
"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 $1.1750 or even $1.15 as a supportlevel as the Federal Reserve tightens monetary policy and theEuropean 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 fell 0.3 percent to $1.1922, while theJapanese yen slipped 0.04 percent to 109.07 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 President Donald Trump willwithdraw the United States from the Iranian nuclear pact alsoweighed on crude prices.
U.S. crude rose $1.01 to settle at $70.73 a barrel,breaking above the $70 mark for the first time since November2014, while Brent gained $1.30 to settle at $76.17.
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 0.59 percentadvance in the pan-European FTSEurofirst 300 index ofleading regional shares. Oil giants Royal Dutch Shelland Total were the fourth- and seventh-biggestcontributors, respectively.
On Wall Street, the S&P energy index was the biggestgainer among the 11 major sectors during much of the session butfaded by the close, ending up 0.18 percent.
Trump tweeted that on Tuesday he would announce his decisionon whether to withdraw from the Iran nuclear deal.
"Oil has done well in anticipation of the announcement fromTrump. People are braced for the worst," said Keith Lerner,chief market strategist at SunTrust Advisory Services inAtlanta.
The Dow Jones Industrial Average closed up 94.81points, or 0.39 percent, at 24,357.32. The S&P 500 gained9.21 points, or 0.35 percent, to 2,672.63 and the NasdaqComposite added 55.60 points, or 0.77 percent, to7,265.21.
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 0.53 percent, while yields on U.S. benchmark 10-yearTreasury notes rose slightly to 2.9516 percent.
Gold slipped, snapping three days of gains, as the U.S.dollar index strengthened.
U.S. gold futures for June delivery settled down 60cents at $1,314.10 an ounce.
(Reporting by Herbert Lash in New York; Editing by Dan Grebler,James Dalgleish and Susan Thomas)
