Dolly puts Gulf on storm watch

Gulf of Mexico oil producers are keeping a close watch on Tropical Storm Dolly, which is growing in strength.

Dolly could intensify into a hurricane later today, the US National Hurricane Center said, and could come ashore tomorrow at the southern tip of Texas, on the Mexican border.

Forecasters believe oil and gas producers will be spared the storm but operators are still cautious after 2005's Hurricane Katrina, which disrupted production for months.

Royal Dutch Shell has evacuated 125 workers from oil platforms in the Gulf and will remove 60 more today. Exxon Mobil said it was preparing platforms for heavy rain and high winds.

Concern about the storm pushed oil prices higher yesterday, but they retreated slightly in Asian markets today. New York light sweet crude for August delivery fell 57 cents to $130.47 a barrel while September Brent dropped 56 cents to $132.05.