TOKYO: Oil prices extended gains on Tuesday, hovering near a six-week high, on signs another storm could affect output in Texas this week even as the U.S. industry struggles to return production after Hurricane Ida wreaked havoc on the Gulf Coast.

Brent crude rose 15 cents, or 0.2% to $73.66 a barrel by 0048 GTM, having gained 0.8% the previous day. U.S. West Texas Intermediate (WTI) crude CLc1 also climbed 23 cents, or 0.3%, to $70.68 a barrel, after rising 1.1% on Monday.

Both benchmarks were hovering near their highest since early August hit the previous day.

Evacuations were underway on Monday from offshore U.S. Gulf of Mexico oil platforms as onshore oil refiners began preparing for Tropical Storm Nicholas, which was heading towards the Texas coast with 70 miles per hour(113 kph) winds, threatening coastal Texas and Louisiana still recovering from Hurricane Ida. 

"Concerns over Nicholas prompted buying as it is likely to hit the area devastated by Ida though the force is not expected to be as strong as Ida," said Hiroyuki Kikukawa, general manager of research at Nissan Securities.

More than 40% of the U.S. Gulf's oil and gas output remained offline on Monday, two weeks after Ida slammed into the Louisiana coast, according to offshore regulator Bureau of Safety and Environmental Enforcement (BSEE). 

"But market upside will be limited as U.S. summer driving season waned and there are potential supply increases from planned releases of oil from strategic reserves in the United States and China as well as the possible resumption of oil export by Iran," Kikukawa said.

The U.S. government agreed to sell crude oil from the nation's emergency reserve to eight companies including Exxon Mobil, Chevron and Valero, under a scheduled auction to raise money for the federal budget. 

Traders noted China's planned release of oil from strategic petroleum reserves (SPRs) could boost supplies available in the world's the second biggest oil consumer. 

Hopes of fresh talks on a wider nuclear deal between Iran and the West were raised after the United Nations atomic watchdog reached an agreement with Tehran on Sunday about the overdue servicing of monitoring equipment. 

Adding to pressure, U.S. oil output from seven major shale formations is expected to rise by about 66,000 bpd in October to 8.1 million bpd, the highest since April 2020, according to the Energy Information Administration's monthly drilling productivity report. 

The Organization of the Petroleum Exporting Countries (OPEC), meanwhile, trimmed its world oil demand forecast for the last quarter of 2021 due to the Delta coronavirus variant. 

(Reporting by Yuka Obayashi Editing by Shri Navaratnam) ((Yuka.Obayashi@thomsonreuters.com; +813-4520-1265;))