PHOTOS: Hurricane Dolly

VIDEO: Dolly Hits Texas

HOUSTON (Reuters) - Hurricane Dolly hit the south Texas coast on Wednesday with 95 mph winds, pouring torrential rain on the U.S.-Mexico border area and threatening floods in low-lying areas.

Dolly, the second hurricane of the 2008 Atlantic hurricane season, dropped up to 12 inches of rain in the first few hours after coming ashore at the barrier island of South Padre Island, where it ripped off roofs, bent palm trees in half and left thousands of residents without power.

"My dock has been torn down," said Russell Stockton, who operates Dolphin Docks, a dolphin-viewing tour company, on South Padre Island, a popular tourist resort. "It's about $50,000 worth of damage so far."

The storm's leading edge hit the island as a Category 2 hurricane, the second level on the five-step Saffir-Simpson scale, with maximum sustained winds of 100 mph (160 kmh), but quickly fell back to Category 1, the National Hurricane Center said.

"The main hazard from this storm is probably going to be inland flooding," said John Nielsen-Gammon, official climatologist for the state of Texas and a professor at Texas A&M University.

The storm avoided most offshore drilling rigs and production platforms in the Gulf of Mexico. U.S. crude oil prices, affected earlier in the week by worries about possible storm damage, hit 6-week lows on Tuesday and fell further on Wednesday to below $125 a barrel.

Mexico's navy said it recovered the body of a fisherman who had gone missing off the Yucatan Peninsula as the storm passed through but no other casualties were immediately reported.

The prospect of heavy rains and a storm surge of sea water pushing back upstream spurred concern that levees holding back the Rio Grande River could be breached, causing widespread flooding.

The National Hurricane Center said Dolly could dump up to 20 inches of rain in South Texas and northeastern Mexico in coming days.

Texas Gov. Rick Perry put 1,200 National Guard troops on alert and issued a disaster declaration for 14 low-lying counties.

State officials had said they would not order mandatory evacuations unless Dolly reached Category 3, with wind speeds of over 111 mph (178 kph). Some 250 buses stood by in the inland city of San Antonio to evacuate coastal residents if needed.

FLOODING IS MAJOR CONCERN

In Cameron County near the Mexico border, officials expected up to 20 inches of rain. "That's going to do a number on our county," said Johnny Cavazos, the county's emergency management coordinator,

He said levees holding back the Rio Grande held under similar conditions during Hurricane Beulah in 1967, but have "seriously deteriorated" since then.

Texas State Police Captain Joe Gonzalez, who heads the combined emergency management system in Brownsville, said he was confident the levees would hold.

More than 27,000 customers were without electricity in South Texas, most of them in Cameron County, according to the power company.

In the Mexican city of Matamoros, across the border from Brownsville, gusts of wind and rain pummeled the town and many streets began to flood.

The 2008 Atlantic hurricane season is already a month ahead of schedule. On average, the fourth tropical storm of the six-month season does not occur until August 29. Dolly, this year's fourth, formed on July 20.

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