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Tropical Storm Karen weakens as it nears U.S. Gulf Coast

* Storm weakens, not expected to become a hurricane

* Karen halts half of oil output in U.S. Gulf

By Kathy Finn

NEW ORLEANS, Oct 5 (Reuters) - Tropical Storm Karen continued to weaken on Saturday as it approached the Louisiana coast after prompting the evacuation of some low-lying coastal areas and disrupting U.S. energy output in the Gulf of Mexico.

Karen's top winds dropped to 40 mph (65 kph), down from 65 mph (105 kph) on Thursday and 50 mph (80 kph) on Friday, and National Hurricane Center forecasters in Miami said they no longer expected it to gain strength over the weekend, keeping it a weak tropical storm.

Originally forecast to become a hurricane, authorities issued mandatory evacuation orders for low-lying areas south of New Orleans on Friday.

Tropical storm watches and warnings were still in effect in other areas including metropolitan New Orleans and Lake Pontchartrain. Tropical storms carry winds of 39 mph to 73 mph (63 kph to 118 kph).

The governors of Louisiana, Mississippi, Florida and Alabama declared states of emergency to speed storm preparations and the Federal Emergency Management Agency recalled some workers who were furloughed in the federal government shutdown to assist.

Oil output in the U.S. Gulf of Mexico was cut in half as oil and gas firms shut platforms and evacuated some workers in preparation for the storm. The Gulf accounts for about 19 percent of U.S. oil production and 6 percent of natural gas output.

By early Saturday, the storm was centered about 185 miles (295 km) southwest of the mouth of the Mississippi River. It was moving north but was forecast to turn to the northeast as it crossed the coast.

Karen's projected path shifted slightly westward and it was expected to move ashore over Louisiana on Saturday night and into Mississippi and then Alabama on Sunday.

The storm could dump up to 6 inches (15 cm) of rain in some areas and to push a surge of seawater over the shoreline, the hurricane center said.