Oil prices climb, with eyes on Dolly storm

World oil prices rose on Tuesday as US forecasters issued a hurricane warning as Tropical Storm Dolly swirled through the Gulf of Mexico, where many US energy facilities are based.

Brent North Sea crude for September delivery added 1.03 dollars to 133.64 dollars per barrel in morning London trade.

New York's main contract, light sweet crude for August delivery, gained 99 cents to 131.97 dollars a barrel.

"Dolly is one of the factors. The situation is not so serious at the moment, but (the storm's) direction is hard to predict," said Ken Hasegawa, a broker at Newedge Japan.

The market had rebounded on Monday, after falling more than 16 dollars last week, as Dolly bounded into the Gulf of Mexico and the international community tightened pressure on oil producer Iran to halt its nuclear programme.

Forecasters issued a hurricane warning on Tuesday as Tropical Storm Dolly threatened to grow into a hurricane within 24 hours near the Mexico-Texas border.

"A hurricane warning is in effect for the coast of Texas from Brownsville to Port O'Connor. A hurricane warning is also in effect for the northeast coast of Mexico from Rio San Fernando north to the border with the United States," the Miami-based National Hurricane Center said at 0600 GMT.

The warning means hurricane conditions are expected in the area in the next 24 hours.

"Preparations to protect life and property should be rushed to completion," the NHC warned.

At 0600 GMT, the center of the storm was about 320 miles (515 km) southeast of Brownsville, Texas, as it moved westward near 17 mph (28 km/hr), it said, noting that "the center of Dolly should be very near the western coast of the Gulf of Mexico on Wednesday."

It was packing maximum sustained winds near 50 mph (85 km/hr) with higher gusts.

US energy major ExxonMobil has started evacuating non-essential personnel from some offshore oil production facilities expected to be in Dolly's path, but the company said there had been limited impact on production thus far.

Chevron and Royal Dutch Shell have also moved non-essential staff from their operations in the western part of the Gulf of Mexico.

The Atlantic hurricane season, which began in June and lasts until the end of November, usually peaks from September onwards and has been largely uneventful until now.

Investors are also watching closely for any developments in the Iran nuclear talks aimed at getting Tehran to halt its uranium enrichment programme, dealers said.