Oil prices surge to near 4-year high

London

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 US$7.15 billion in cash for the rights to sell the US coffee chain's products around the world.

Most Asian markets also rose after Friday's tame reading on US 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-US trade tensions.

US equity futures pointed to a positive open for Wall Street.

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

US crude oil prices rose more than 70 US cents, or 1.1 per cent, pushing above US$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 US$75.64 per barrel at 1210 GMT, up 1.14 per cent and having also touched their highest since November 2014.

Also driving oil prices higher was the May 12 deadline set by US President Donald Trump for Europeans to "fix" the deal with Iran over its nuclear programme. If they do not, Mr Trump has said he would refuse to extend US 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 per cent. The dollar rose to a new 2018 peak, extending its 21/2 week-long rally as investors unwound short positions against the currency and bet that the relative strength of the US 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 eurozone, rose 0.4 per cent to 92.968, having shrugged off Friday's weaker-than-expected jobs report. REUTERS