Storm Dolly to become hurricane, hit Texas

HOUSTON (Reuters) - Tropical Storm Dolly churned toward southern Texas on Monday, and forecasters said they expected it to grow into a hurricane before hitting land near the Mexican border later this week.

The storm, with sustained winds of nearly 50 miles per hour (85 km per hour), emerged from the Yucatan Peninsula over the warm waters of the Gulf of Mexico. A hurricane watch was issued for the southern Texas coast, the U.S. National Hurricane Center said.

Dolly was 420 miles southeast of the border, where it was due to hit on Wednesday near Brownsville, well away from sensitive offshore drilling rigs and production platforms.

The United States has largely escaped the past two Atlantic hurricane seasons, with just one hurricane -- Humberto in November 2007 -- making landfall on its coasts.

But it was pummeled in 2004 and 2005, when a series of powerful hurricanes, including the catastrophic Katrina, ravaged Florida and the U.S. Gulf Coast.

Concerns that Dolly could affect oil production from the Gulf of Mexico helped push crude futures up about $2 a barrel on Monday, although dealers said Dolly appeared likely to pass south and west of the biggest concentration of U.S. platforms.

U.S. forecasters expect Dolly to hit the shore as a Category 1 hurricane with wind speeds up to 86 mph (139 kph) -- the weakest category -- as it gathers energy from the warm waters of the Gulf of Mexico.

In Texas, Gov. Rick Perry put 1,200 National Guard troops on alert, and told citizens to take precautions, though no mandatory evacuations were ordered.

"If the time comes where we do believe that we need to brace for impact from the storm, Texas will be ready," said Krista Pfeiffer, Perry's press secretary. Some 250 buses are standing by in San Antonio for quick evacuations, Pfeiffer said.

The advancing storm turned emergency supplies like generators, plywood and sandbags into hot items.

"We're seeing plywood, a lot of plywood, a lot of anchors, a lot of tarps, sandbags," said Sergio Alonzo, who manages Pico Ace Hardware, a home supply store on South Padre Island.

In Mexico, Dolly dumped rain in Cancun, home to high-rise hotels overlooking white sand beaches, and other resorts in Mexico's Yucatan Peninsula, but no major damage was reported.

The northeastern state of Tamaulipas on Mexico's Gulf Coast, already flooded following heavy rains last week, issued a hurricane warning and began preparing dozens of buildings to receive possible evacuees.

Shell Oil Co. and Chevron Corp. began flying workers from platforms in the western Gulf ahead of the storm, but Mexico's state oil company Pemex said its production was unlikely to be hit.

"As of now there are no changes in the routine activities at Pemex platforms. The course of the storm is passing far away from the installations," said Javier Delgado, a local spokesman for Pemex on Mexico's coast.

(Reporting by Jose Cortazar, Magdiel Hernandez and Mica Rosenberg in Mexico; Erwin Seba and Chris Baltimore in Houston; Jim Forsyth in San Antonio; and Michael Christie in Miami; Editing by Eric Beech)

(For latest U.S. National Hurricane Center reports, see www.nhc.noaa.gov/)