(updates prices, adds index move)
LONDON, Oct 7 (Reuters) - ** Royal Dutch Shell up 2 pct, BP up 1.5 pct, and Shell up 8.7 percent this week while BP is up 7.6 percent over the same period, supported by gains in oil prices and the weakening of the British pound
** Gains lift UK oil and gas index up 2.5 percent to 2-year highs
** Oil prices have risen nearly 11 percent since OPEC agreed on a modest output curb in a meeting at Algiers on Sept. 29
** Sterling recouped some losses after plunging almost 10 percent on Friday amid growing fears of a "hard" exit by Britain from the European Union that sent a shiver through world stocks markets ahead of U.S. jobs data.
** Investors have shifted funds into London-listed companies issuing U.S. dollar denominated dividends in recent months
** Dividends paid out by oil companies expected to grow with IHS Markit forecast the sector to account for nearly 40 pct of dividends paid out in Q4 by FTSE 350 companies