Britain's FTSE posts 2nd week of gains, oil lends support

* FTSE 100 index down 0.2 pct at close

* UK oil stocks hit 2-year high

* Micro Focus falls after downgrade (Recasts, adds quote and detail, updates prices at close)

By Kit Rees and Atul Prakash

LONDON, Dec 16 (Reuters) - Britain's top share index edgedhigher on Friday, building on a seven-week high hit the previousday and buoyed by a rally among oil stocks, though IT firm MicroFocus dropped after a rating downgrade.

The blue-chip FTSE 100 closed 0.2 percent higher at7,011.64 points after climbing on Thursday to 7,010.48 points,its highest level since late October. The index has gained morethan 12 percent so far this year, after climbing 3.3 percentlast week.

Energy stocks added the biggest number of points to theindex, with shares in BP rising 2.1 percent and RoyalDutch Shell gaining 0.9 percent.

The FTSE 350 oil & gas index hit its highestlevel since September 2014 after the price of oil rose asproducers showed signs of complying with a global deal to reduceoutput.

"It's also been a good week for oil and gas producers ... onthe back of further gains for oil prices this week, while theweakness of sterling in the last couple of days is alsohelping," Michael Hewson, chief market analyst at CMC Markets,said.

Micro Focus International, the British firm buyingHewlett Packard Enterprise Co's software business, wasthe biggest faller, down 3.5 percent after UBS cut its rating onthe stock to "neutral" from "buy" and lowered its target priceto 2350 pence from 2420 pence.

"Notwithstanding H1's good results and a $400 millionplanned Return of Value, we see the upside for the shares aslimited now. We see several risks in 2017," UBS analysts said.

"MCRO's cash flow, meanwhile, is likely to show the effectsof significant legal and advisory fees related to the deal aheadof its closing, and restructuring commitments are likely to be afeature thereafter," they said in a note.

Miners came under pressure after prices of major industrialmetals slipped on a stronger dollar, which generally makescommodities costlier for holders of other currencies.

Shares in Antofagasta, Anglo American andGlencore fell 1.3 percent to 2 percent, pushing the UKmining index 0.7 percent lower. (Reporting by Atul Prakash and Kit Rees; Editing by AlisonWilliams)