- Britain's FTSE 100 rose on Friday, as gains in commodity-linked stocks eclipsed lacklustre performances in banking shares following NatWest's profit outlook downgrade, although the benchmark index was set for a second straight weekly drop.

The commodity-focused FTSE 100 was up 0.3% by 0835 GMT.

The mid-cap FTSE 250 snapped a three-day losing streak to climb 0.6%, but is on track to log its sixth weekly decline.

Shares of heavyweight oil and gas companies advanced 2% as oil prices rose by $1 on concerns of an escalation in the Israel-Hamas conflict, that could impact global supply.

Precious metal miners led the gains with a 2.2% jump on higher gold prices as the Middle East conflict kept investors drawn towards the safe-haven bullion.

Industrial metal miners added 1.3%.

"Markets are starting to get a little bit used to the conflict ... One wants to hold risk over the weekend, particularly with the escalation in geopolitical events, so we see stocks being sold," said Giles Coghlan, chief market analyst at GCFX Ltd.

A sharp retreat in long-term U.S. Treasury rates also lifted global investor sentiment.

Shares of NatWest slumped 10.5% to the bottom of the FTSE 100, and were set for their biggest one-day drop since Brexit vote in June 2016, as the British lender downgraded its outlook due to tighter competition for savers' cash.

The banks index lost 0.4% following the news of NatWest's revised outlook.

IAG beat forecasts with a strong third-quarter profit, but the British Airways-owner flagged economic uncertainities and was unsure how the Middle East turmoil could affect bookings and jet fuel costs into next year. Shares of IAG slipped 0.4%.

The European Central Bank stood pat on interest rates on Thursday, as expected, while the Bank of England is also expected to announce a pause in rate hikes in the central bank's policy meeting next week.

(Reporting by Khushi Singh; Editing by Sherry Jacob-Phillips)