Hurricane Alex weakened to a tropical storm on Thursday as it moved further inland over northeastern Mexico, dumping heavy rains that flooded towns but sparing U.S. oil facilities near its path.

Alex made landfall as a Category 2 Hurricane on the Tamaulipas coast around 9 p.m. on Wednesday (0200 GMT Thursday). U.S. oil installations have not been hit by the storm, which formed near the Yucatan peninsula on Saturday, but some companies cut back production and evacuated staff.

As of Wednesday, oil companies had shut down production of more than 421,000 barrels per day, about a quarter of the Gulf's output, as a precaution.

They have also shut 919 million cubic feet per day of gas output, some 14 percent of the Gulf's total.

BP Plc said on Thursday its Gulf oil and gas output was back to normal, although the passage of Alex delayed efforts to control its leaking oil well off the Louisiana coast.

The Louisiana Offshore Oil Port, the nation's only deepwater oil supertanker unloading terminal, hopes to resume operations by late Thursday, a spokeswoman said.

Alex, which uprooted trees and knocked over flimsy houses on the Tamaulipas coast, had maximum sustained winds of 70 mph (110 kph) and was located about 55 miles (85 kms) west of Ciudad Victoria, Mexico.

Rain from the first named storm of the 2010 Atlantic season swelled the streets of the port city of Matamoros. Across the border in Brownsville, Texas, at least three tornadoes swept through the area, although no major damage was reported.

"We are all exhausted and the water is up to our waists in the street," said a bedraggled man as he struggled to reach a crowded shelter in Matamoros.

communities along the Gulf coast and into shelters, but some refused to leave their homes even as water ran in under doors.

"Additional weakening is forecast as Alex continues to move inland," the U.S. National Hurricane Center said. "Alex is expected to weaken to a tropical depression later today and dissipate in the next 24 to 36 hours."

However, local authorities will remain on high alert in case of rainfall as high as 20 inches (50 cm).

One man died in Monterrey on Wednesday when his house collapsed in the heavy rains, rescue authorities said. Alex killed a dozen people in Central America over the weekend.

Reuters