(Updates prices, adds sectors) July 21 (Reuters) - Canada’s main stock index extended gains on Wednesday, after rising by the most in nearly two months in the previous session, as energy stocks benefited from higher oil prices. * The energy sector climbed 1.8% as U.S. crude prices were up 2.5% a barrel, while Brent crude added 2.3%. * At 9:40 a.m. ET (13:40 GMT), the Toronto Stock Exchange’s S&P/TSX composite index was up 125.16 points, or 0.63%, at 20,067.87. * Great-West Lifeco Inc (Lifeco) rose 1.26% after the insurer said its U.S. unit would buy Prudential Financial Inc’s full-service retirement business for about C$4.45 billion ($3.51 billion) in one of its biggest deals yet. * The financials sector gained 1%. The industrials sector rose 0.5%. * The materials sector, which includes precious and base metals miners and fertilizer companies, added 0.3% even as gold futures fell 0.2% to $1,807 an ounce. * On the TSX, 182 issues were higher, while 46 issues declined for a 3.96-to-1 ratio favoring gainers, with 10.94 million shares traded. * The largest percentage gainers on the TSX were Vermilion Energy Inc, which jumped 3.4% after JPMorgan raised price target for the oil producer’s stock, and miner Lithium Americas Corp, which rose 3.2%. * Medical marijuana company OrganiGram Holdings Inc fell 1.2%, the most on the TSX, and the second-biggest decliner was gold miner Wesdome Gold Mines Ltd, down 1.1%. * The most heavily traded shares by volume were Bombardier Inc, and Baytex Energy Co. * The TSX posted no new 52-week highs and no new lows. * Across all Canadian issues there were 18 new 52-week highs and 11 new lows, with total volume of 23.62 million shares. Reporting by Amal S in Bengaluru; Editing by Aditya Soni Our Standards: The Thomson Reuters Trust Principles.