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

The storm, with sustained winds of nearly 50 miles per hour (85 km per hour), 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 420 miles (680 km) southeast of the border, where it was due to hit on Wednesday near Brownsville, well away from sensitive offshore drilling rigs and production platforms.

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 the catastrophic Katrina, ravaged Florida and the U.S. Gulf Coast.

Concerns that Dolly could affect oil production from the Gulf of Mexico helped push crude futures up about $2 a barrel on Monday, although dealers said Dolly appeared likely to pass south and west of the biggest concentration of U.S. platforms.

U.S. forecasters expect Dolly to hit the shore as a Category 1 hurricane with wind speeds up to 86 mph (139 kph) -- the weakest category -- as it gathers energy from the warm waters of the Gulf of Mexico.

In Texas, Gov. Rick Perry put 1,200 National Guard troops on alert, and told citizens to take precautions, though no mandatory evacuations were ordered.

"If the time comes where we do believe that we need to brace for impact from the storm, Texas will be ready," said Krista Pfeiffer, Perry's press secretary. Some 250 buses are standing by in San Antonio for quick evacuations, Pfeiffer said.