Storm Alex nears hurricane strength in Gulf of Mexico

Tropical storm Alex was close to hurricane strength in the Gulf of Mexico on Tuesday, but it remained on a track north of Mexican energy platforms and far southwest of US fields, further easing concerns in the oil market 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 to hit the coast of southern Texas or northern Mexico around mid-week.

As worries over oil-field disruption eased, US oil prices traded down more than 3% at below $76 a barrel. But a string of oil companies evacuated some or all workers from platforms near Alex's path.

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 (4 metres) would delay plans to hook up a third oil capture system, said Kent Wells, BP executive vice-president.

As a precautionary measure Hess Corp said it was evacuating all personnel from its 'Bald Pate' platform in the Gulf of Mexico ahead of the storm.

Shell Oil Co, Exxon Mobil Corp, Anadarko Petroleum Corp, Marathon Oil Corp, and Apache Corp evacuated non-essential workers from platforms near Alex's path.

Shell also shut sub-sea production at the Auger and Brutus platforms over the weekend that produce 210,000 barrels per diem while Marathon halted production at its Ewing Banks platform which produces 9,700 bpd.

Valero Energy Corp said on Tuesday that it had begun placing emergency supplies at refineries and retail outlets along the Gulf coast ahead of Alex but had not altered production at any of its facilities.

Alex was packing sustained winds of about 70 mph (110 kph) and was located about 355 miles (570 km) southeast of Brownsville, Texas. It was moving north-northwest at 12 mph (19 kph), the US National Hurricane Centre said at 11am EDT (1500 GMT).

Forecasters expected Alex to become a hurricane later in the day and hit land on Wednesday night, bringing 6 to 12 inches (15 to 30cm) of rain to northeastern Mexico and southern Texas as well as dangerous storm surges along the coast.

Officials in South Texas readied rescue vehicles and 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 on Monday issued a disaster proclamation for 19 counties, and ordered rescue boats, helicopters, and other assets moved to the state's southernmost communities.

A hurricane warning was in effect for the coast of Texas south of Baffin Bay to the mouth of the Rio Grande, and along the coast of Mexico from the Rio Grande to La Cruz.

Dos Bocas and Cayo Arcas, which handle 80% of Mexico's oil export shipping in the Gulf, have been closed since Sunday owing to strong surf in the area.

State-run oil giant Pemex said its platforms in the Campeche Sound were working normally on Monday although it suspended helicopter flights to and from the facilities.

Pemex was due to release an update later on Tuesday.

Pemex said it was monitoring wind and surf conditions. Alex. Its Isla del Carmen port, not essential for oil shipments, has been closed since Sunday night.    Barbara Blakely, a spokeswoman for Shell, told Reuters on Monday the company was closely monitoring Alex''s advance in the Gulf but that its LNG plant in Altamira, Mexico was working as usual.    At least 10 people have been killed in Central America since the weekend in accidents related to Alex, local authorities reported.    The Atlantic hurricane season runs from June 1 to Nov 30 and meteorologists predict this year will be a very active one. Hurricanes feed on warm water and the sea surface temperatures in the tropical Atlantic are higher than usual this year.  (Additional reporting by Cyntia Barrera Diaz in Mexico City, Ana Driver in Houston, Jose Cortazar in Cancun, Nelson Renteriain El Salvador, Sarah Grainger in Guatemala, Ivan Castro in Nicaragua; Editing by Frances Kerry)