Rita now Category 4 hurricane

MIAMI (Reuters) - After lashing the Florida Keys, Hurricane Rita was upgraded on Wednesday into a more powerful Category 4 storm as it headed across the Gulf of Mexico on a course that could take it to Texas and dump more rain on Katrina-battered Louisiana.

Rita's winds increased to 135 mph (193-kph) winds as it headed into the Gulf. The storm hit the Florida Keys but did not get close enough to reach the vulnerable chain of islands with its most destructive forces.

The upgrade put Rita in the same strength classification as Hurricane Katrina, which devastated parts of Louisiana, Mississippi and Alabama last month, and it sparked concern in financial markets that the new storm could wreak as much damage as Katrina's assault on the U.S. Gulf Coast last month.

U.S. crude-oil prices rose and the dollar weakened against the euro. U.S. stock futures also pointed to a lower market open.

Rita's most likely future track would take it to Texas by the end of the week, raising fears the sprawling storm could bring heavy rains to flooded New Orleans and threaten the recovery of oil production facilities in the Gulf of Mexico.

With Rita looming, Louisiana declared a state of emergency and New Orleans, 80 percent of which was flooded when Katrina shattered its protective levees, was taking no chances. Mayor Ray Nagin said two busloads of people had been evacuated already and 500 other buses were ready to roll.

"We're a lot smarter this time around," he said. "We've learned a lot of hard lessons."

With grim news footage of Katrina's assault still fresh in their minds, officials along the Texas Gulf Coast prepared for Rita. An evacuation was ordered for Galveston and several schools in the region planned to cancel classes.

About 1,100 Hurricane Katrina evacuees still in Houston's two mass shelters faced another evacuation as the city found itself in Rita's possible path. They were being sent to Fort Chaffee, Arkansas.


Rita's center was about 195 miles west of Key West, Florida, at 8 a.m. EDT. The hurricane was headed west into the southeastern Gulf of Mexico at about 14 mph (22 kph), the U.S. National Hurricane Center said.

The hurricane center said Rita became a Category 4 hurricane on the Saffir-Simpson scale -- with sustained winds above 135 mph (217 kph) on Wednesday morning.

"The conditions over the central Gulf are much like they were for Katrina," hurricane center deputy director Ed Rappaport told CNN.

A major hurricane could send a 20-foot (6-meter) storm surge over the Texas coast by Saturday.

Oil companies just starting to recover from Katrina evacuated Gulf oil rigs as Rita moved toward major energy production areas.

The Navy began moving its remaining fleet of Katrina relief vessels, including the Iwo Jima, away from the Gulf Coast to ride out any potential battering from Rita.

U.S. light crude oil rose $1.80 per barrel to $68, its highest level in three weeks. The dollar lost 1 percent against the euro and Swiss franc, and some analysts cited concerns that damage caused by the hurricanes could prompt the Federal Reserve to scale back plans to raise interest rates.

President George W. Bush was briefed on Tuesday on the growing storm aboard the helicopter assault landing ship Iwo Jima, which is docked in New Orleans and has served as the military's Katrina relief headquarters.

Bush, who was criticized as being caught off guard by the severity of Katrina, said he had sent an admiral to Texas to coordinate any needed response to Rita.

Residents of the Florida Keys were grateful that Rita merely skirted their area.

"We did not have the flooding I thought we'd have," Key West Mayor Jimmy Weekley told reporters. "We were extremely lucky."

All 80,000 residents had been ordered out of the Keys island chain but many stayed behind in boarded-up homes. Rita's winds pushed seawater, sand and seaweed onto the Overseas Highway, the only road linking the islands to the mainland and flooded some buildings.

The storm swamped streets and knocked out power in Key West, the tourist playground at the western end of the island chain. But officials said the city fared well.

Bush signed an emergency declaration making federal assistance available to Florida, at the request of his brother, Florida Gov. Jeb Bush.

Rita was the seventh hurricane to hit Florida in 13 months.

(Additional reporting by Michael Peltier in Tallahassee, Jane Sutton and Michael Christie in Miami, Adam Entous in New Orleans, Mark Babineck in Houston and Marc Frank in Havana)

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