Tropical Storm Lee threatened the Louisiana coast with torrential rains and flooding and shut nearly half of US offshore crude oil production and a third of its gas production.
The slow-moving storm is expected to reach the Louisiana coast early on Sunday and bring 25-38cm of rain to southeast Louisiana over the weekend, including the low-lying city of New Orleans, the US National Hurricane Centre said.
Lee was about 320kms southeast of Cameron, Louisiana, with maximum winds of 65kph.
Tropical storm warnings were issued for areas stretching from Pascagoula, Mississippi, to Sabine Pass, Texas.
Louisiana Governor Bobby Jindal warned that heavy rains, substantial winds and tidal surges from the Gulf of Mexico could produce flash flooding in parts of New Orleans throughout the US Labor Day holiday weekend.
"Get ready for the wind, get ready for the rain, it's coming and it's going to be here for a while," Mr Jindal said at a briefing in Baton Rouge.
Mr Jindal has declared a state of emergency for Louisiana, and Mississippi Governor Haley Barbour made a similar ruling for seven coastal counties.
Lee has a 50-60% chance of reaching hurricane strength, AccuWeather Senior Meteorologist Bernie Rayno told Reuters.
Major offshore producers like Royal Dutch Shell, Exxon Mobil Corp and BP Plc shut down platforms and evacuated staff earlier this week.
The prospects of flooding in low-lying New Orleans elicited memories of Hurricane Katrina in 2005, which flooded 80% of the city, killed 1,500 people and caused more than $80 billion in damage.
But Lee's flooding potential is much lower and should spur nothing more than localized flooding in coastal and low-lying areas, New Orleans safety officials said.
