Alex nears hurricane status

MEXICO CITY (Reuters) - Tropical Storm Alex was close to hurricane strength in the Gulf of Mexico on Tuesday but remained on a track north of Mexican oil platforms and far southwest of U.S. fields, further easing crude market concerns over supply disruption.

Alex, the first named storm of the Atlantic hurricane season, was forecast to move slowly away from the Yucatan Peninsula over southern Gulf waters and curl northwest away from major oil-extraction facilities. It is expected to hit the coast of southern Texas or northern Mexico around mid-week.

As worries over drilling disruption eased, U.S. crude oil prices for August fell $2.31, or 2.95 percent, to settle at $75.94 a barrel.

While most forecaster models showed Alex passing south of major offshore oil and natural gas platforms, some energy companies evacuated personnel and shut down some production as a precautionary measure.

Shell Oil Co shut subsea production over the weekend at the Auger and Brutus platforms that produce 210,000 barrels per day while Marathon halted production at its Ewing Banks platform, which produces 9,700 bpd.

The storm was not expected to damage oil capture systems that BP Plc has mounted over its huge Gulf oil spill, or interrupt the company's plans to drill a pair of relief wells intended to plug the leak by August, a BP executive told reporters in Houston.

But waves as high as 12 feet would delay plans to hook up a third oil capture system, said Kent Wells, a BP executive vice president.

Alex was packing sustained winds of about 70 mph and was located about 290 miles southeast of Brownsville, Texas. It was moving northwest at 13 mph, the U.S. National Hurricane Center said at 4 p.m. EDT.

Forecasters expected Alex to become a hurricane in the next few hours and hit land on Wednesday night, bringing 6 to 12 inches of rain to northeastern Mexico and southern Texas as well as dangerous storm surges along the coast.

MEXICO CLOSES PORTS

Officials in south Texas readied rescue vehicles, shelters in San Antonio and Laredo and rushed supplies to the Rio Grande Valley. Bob Pinkerton, mayor of South Padre Island, a coastal community where the entire economy rests on tourism, urged residents and visitors to evacuate.

Texas Governor Rick Perry has issued a disaster proclamation for 19 counties, and ordered rescue boats and helicopters moved to the state's southernmost communities.

A hurricane warning was issued for the coast of Texas south of Baffin Bay down to the mouth of the Rio Grande, and along the coast of Mexico La Cruz. A tropical storm warning extended down to Cabo Rojo, just south of the port city of Tampico.

Mexico has closed its Gulf coast ports of Dos Bocas and Cayo Arcas -- which handle around 80 percent of the country's oil exports -- since Sunday due to strong surf.

Mexican state oil monopoly Pemex has said its platforms in the southern Gulf are working normally, but it has suspended helicopter flights to and from the facilities.

Shell was closely monitoring Alex's advance in the Gulf but said its liquefied natural gas, or LNG, plant in Altamira, Mexico, was operating as usual.

Alex killed at least 10 people in Central America, some in storm-related accidents, as it passed overland at the weekend.

The Atlantic hurricane season runs from June 1 to Nov 30 and meteorologists predict this year will be very active. Hurricanes feed on warm water and the sea surface temperatures in the tropical Atlantic are higher than usual this year.

(Reporting by Cyntia Barrera Diaz and Caroline Stauffer and Ana Driver in Houston. Editing by Chris Wilson)