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Hurricane Dolly

Hurricane Dolly

Storm Dolly may become hurricane

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

The storm, with sustained winds of nearly 50 mph (85 kph), 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 forecast to hit Texas just above the Mexican border near Brownsville on Wednesday.

In Cancun, home to high-rise hotels overlooking white sand beaches, the local government lifted a weekend storm warning and all ports and airports were operating normally. Tourists hit the beaches as usual on Monday morning.

Concerns that the storm could affect oil production from the Gulf of Mexico pushed crude futures higher Monday, although dealers said Dolly appeared likely to pass south and west of the biggest concentration of U.S. platforms.

Shell Oil Co began flying workers from platforms in the western Gulf on Sunday, 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.

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 pummelled in 2004 and 2005, when a series of powerful hurricanes, including Katrina, ravaged Florida and the U.S. Gulf Coast.

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