WASHINGTON -- Tropical Storm Dolly grew into a category one hurricane Tuesday as it headed toward the US-Mexican border, forcing the evacuation of thousands in Mexico while the US Navy sheltered aircraft.

Packing sustained winds of 120 kilometers (75 miles) per hour, the second hurricane of the season was about 265 kilometers (165 miles) southeast of the Texas border town of Brownsville, the US National Hurricane Center said.

The storm was moving northwest at 16 kph (10 mph), the center said in its latest update at 2100 GMT.

"This motion should bring the core of Dolly near northeastern Mexico or extreme southern Texas on Wednesday," it added.

National Hurricane Center director Bill Read warned that the hurricane was expected to make landfall "in the early morning hours" of Wednesday.

"They'll have adverse weather from now on in," Read said on CNN.

"It's not going to be a picnic on Padre Island," he added, referring to the long, narrow barrier island along the Texas coast that is dotted with resort communities.

A category one storm is the lowest rating in the five-level Saffir-Simpson scale, but the center predicted six to 10 inches (15 to 25 centimeters) of rain accumulation over south Texas and northeast Mexico in the coming days.

Isolated areas were expected to see as many as 15 inches of rain along with massive waves and flooding at the point of impact, the NHC said.

"Coastal storm surge flooding of four to six feet (1.2 to 1.8 meters) above normal tide levels along with large and dangerous battering waves can be expected near and to the north of where the center makes landfall."

The hurricane led to the evacuation of more than 23,000 people from coastal areas in the Mexican state of Tamaulipas, Governor Eugenio Hernandez said.

The US Navy ordered more than 100 aircraft moved inland from air stations along the Texas coast.

Some, but not all, oil drilling companies evacuated personnel from their offshore rigs as companies waited to see where the storm would make landfall, the Houston Chronicle reported.

World oil prices have crept up slightly, on fears that the storm could disrupt oil or gas production in the Gulf of Mexico.

US energy major ExxonMobil has started evacuating "non-essential" personnel from some offshore oil production facilities expected to be in Dolly's path, but the company said there had been limited impact on production thus far.

Chevron and Royal Dutch Shell have also moved non-essential staff from their operations in the western part of the Gulf of Mexico.

"The first storm in always gets the adrenaline pumping, and it helps bring everybody into the mind set for hurricane season," said BP spokesman Tom Mueller, quoted by the Houston Chronicle.

BP has not evacuated workers nor halted production in the Gulf, the report said.

Around one quarter of US domestic crude production and 15 percent of natural gas output comes from the Gulf of Mexico, according to the Minerals Management Service.

Texas Governor Rick Perry activated 1,200 National Guard troops and other emergency crews in advance of the storm, US media reported.

The NHC has forecast an especially active 2008 weather season, saying there could be up to nine hurricanes and 12 tropical storms in the Atlantic region. The Atlantic hurricane season runs from June 1 through the end of November.

About 35 million people live in the most hurricane-prone US region, the southeastern coastline running from the states of North Carolina to Texas, according to the US Census Bureau.