UK's FTSE 100 set for first monthly drop in five despite recent gains

Nov 28 (Reuters) - London's FTSE 100 inched higher on Friday, led by energy stocks as oil prices rose, though the index was set to snap a four-month winning streak despite a budget-driven boost earlier this week.

The globally focused FTSE 100 .FTSE was up 0.1% by 1125 GMT, while the midcap FTSE 250 .FTMC was flat, on pace for a small monthly drop.

Oil & Gas .FTNMX601010 added 0.7%, tracking a gain in oil prices on uncertainty over Russia-Ukraine peace talks. Investors await the outcome of an OPEC+ meeting on Sunday.

Chemicals .FTNMX552010 climbed 0.9% with shares of Johnson Matthey JMAT.L up 1.8% after J.P.Morgan upgraded its rating on the company to "overweight" from "neutral."

Both FTSE 100 and FTSE 250 are on track for firm weekly gains after finance minister Rachel Reeves earlier this week announced a big tax-raising budget that created greater room for her to meet her deficit-reduction targets.

Traders ramping up bets for a U.S. Federal Reserve rate cut in December, following dovish remarks from policymakers, also boosted UK stocks in the last two weeks of November.

Long-dated gilt yields were flat after dropping earlier this week, while the pound GBP= lost some ground against the dollar.

Precious metal miners .FTNMX551030 are on pace to be the best performing sector this month as gold prices rallied, while the aerospace and defence .FTNMX502010 sector is among the laggards as prospects of a peace deal between Russia and Ukraine grew.

Among other moving stocks, Burberry BRBY.L fell 2.3% after J.P.Morgan downgraded the luxury firm's rating to "underweight".

Mitchells & Butlers MAB.L jumped 11.5% after the pub and restaurant operator reported annual profit above expectations.

Meanwhile, investors were on the lookout for updates on an outage at the world's biggest exchange operator, CME Group, which hit trading on currency and futures in the U.S. on Friday.