U.S. crude rose 73 cents to $70.45, while Brent gained $1.22 to $76.09.
The dollar rose to fresh 2018 highs on Monday while oil prices surged to their highest since late 2014, driven by declining Venezuelan crude production and worries the Unites States could re-impose sanctions on Iran.
The crude surge lifted energy stocks in Europe and on Wall Street, with European shares supported by strong results and gains in Nestle after the Swiss company agreed to pay $7.15 billion to Starbucks in a global coffee alliance, APA reports quoting Reuters.
The euro broke below $1.19 for the first time this year on weaker-than-expected German industrial orders and declining euro zone investor sentiment.
Investors increased bets that rising U.S. interest rates would continue to boost the dollar, while traders unwound their bearish positions on the greenback.
An index that tracks the dollar against a basket of leading currencies 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 probably going to continue to move a bit higher against the euro in particular, 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 support level, Hatheway said, as the Federal Reserve tightens monetary policy and the European economy trends weaker, he said.
“There’s a general appreciation the Fed is going to move at least twice again this year and the consensus is shifting toward three more moves this year.”
The euro slid 0.27 percent to $1.1926, while the Japanese yen was little changed at 109.09 per dollar.
Venezuelan oil exports came under threat after U.S. oil major ConocoPhillips moved to take Caribbean assets of state-run PDVSA to enforce a $2 billion arbitration award, three sources told Reuters.
The move could further crimp PDVSA’s declining oil output and exports.
Widespread expectations that U.S. President Donald Trump will withdraw from the Iranian nuclear pact also weighed on crude prices.
U.S. crude rose 73 cents to $70.45 a barrel, while Brent gained $1.22 to $76.09.
Nestle rose 1.6 percent after it gained the rights to market Starbucks products around the world outside of the U.S. company’s coffee shops.
Nestle was the biggest contributor to the 0.61 percent advance in the pan-European FTSEurofirst 300 index of leading regional shares. Oil giants Royal Dutch Shell and Total also were among the biggest contributors.
On Wall Street, the S&P energy index was the biggest gainer, 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 13.78 points, or 0.52 percent, to 2,677.2 and the Nasdaq Composite added 65.01 points, or 0.9 percent, to 7,274.62.
Euro zone government bond yields slid as the unexpected fall in German industrial output was seen as encouraging the European Central Bank to prolong an unwinding of stimulus.
The yield on the benchmark 10-year German bund fell to 0.531 percent, while yields on U.S. benchmark 10-year Treasury notes rose to 2.9572 percent.
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