POZA RICA, Mexico (Reuters) - Hurricane Dean ripped into Mexico's Gulf coast on Wednesday with screaming winds and torrential rain that flooded towns, forced thousands into shelters and worried world oil markets.
Large trees felled by wind were blocking main roads in the oil town of Poza Rica as Dean, packing winds of up to 100 mph (160 kph), made landfall in Mexico for the second time.
"It's spectacular, it's very powerful," said hotel manager Felipe Torres near where the center of the storm hit land.
No one was reported dead from Dean's two-day rampage in Mexico despite howling winds that earlier put it in the fiercest Category 5 level of hurricanes.
It finally weakened to a tropical storm on Wednesday afternoon and was not expected to threaten the U.S. coastline.
But the state government of Veracruz warned of heavy rains, which often cause mudslides in poor mountain villages after hurricanes pass.
"It's raining and it's going to keep raining intensely in the coming days," said Gov. Fidel Herrera.
Dean had pounded Mayan villages and beach resorts in a run across the Yucatan Peninsula on Tuesday and then passed through the Campeche Sound where the vast majority of Mexico's crude for export to the United States is produced.
Mexico's state oil monopoly Pemex said oil production, 80 percent of which was cut due to the storm, would begin to return to normal on Friday.
Dean was the first hurricane in the Atlantic basin to strike land as a Category 5 since Hurricane Andrew in 1992.
Storm surge left large parts of the Ciudad del Carmen oil port under water. There was flooding throughout Veracruz state, including Poza Rica which is home to oil storage facilities and energy pipelines, although it is not a major producing area.
Dean lost strength soon after landing near here but its rains fell in Mexico City more than 125 miles away.
They also battered the old city of Veracruz, a major Gulf port with a tropical feel and often compared to Cuba's Havana.
"There has been panic buying of food in supermarkets," said Gabriela Navarrete, 35, who runs a bar in the city, near where Spanish conquistador Hernan Cortes landed in Mexico in 1519 on his way to conquer the Aztec empire.
Dean hammered Mexico's Caribbean resort of Tulum and swallowed sand from the famous beach at Cancun on Tuesday after killing 12 people in Haiti, Jamaica and other parts of the Caribbean.
Mexico is one of the top three suppliers of U.S. crude imports and Pemex evacuated more than 18,000 oil workers, shut down 2.65 million barrels per day of production -- slightly more than Venezuela's total output -- and closed ports as Dean approached.
Insured losses from the hurricane were likely to reach up to $400 million in Mexico, said AIR Worldwide Corp, risk modeling consultants.
The government did not expect Dean to cause substantial damage or hurt production of coffee and sugar crops in Veracruz state, an agriculture ministry spokesman said.
Additional reporting by Tomas Sarmiento in Veracruz; Adriana Barrera, Chris Aspin and Noel Randewich in Mexico City