* Energy companies evacuating some workers, cutting production
* Some furloughed FEMA workers are ordered back on the job
* Karen could briefly become a hurricane as it approaches coast (Updates position, adds FEMA workers recalled)
By Jane Sutton
MIAMI, Oct 3 (Reuters) - Tropical Storm Karen formed in the southeastern Gulf of Mexico on Thursday and was forecast to sweep through U.S. oil installations before hitting the Gulf Coast between Louisiana and the Florida Panhandle, the National Hurricane Center said.
Energy companies in the Gulf started shutting in production on Thursday and were evacuating some workers from offshore platforms as Karen approached a region that produces nearly a fifth of daily U.S. oil output.
Three days after much of the U.S. government was closed down over a budget standoff, the Federal Emergency Management Agency began recalling furloughed workers to help prepare for the storm.
The storm, the first to threaten the U.S. coast during the 2013 Atlantic hurricane season, had top winds of 65 mph (105 kph) and was centered about 430 miles (695 km) south of the mouth of the Mississippi River.
It was moving north-northwest and was expected to slow down and turn north. Coastal residents could start feeling its bluster by Friday night and the center was expected to cross the coastline east of the Mississippi-Alabama border early on Sunday.
A hurricane watch was issued for the coast from Grand Isle, Louisiana, eastward to Indian Pass, Florida, alerting residents to expect hurricane conditions within 48 hours.
Karen would become a hurricane if its sustained winds reach 74 mph (119 kph). That was expected to happen late Friday.
"Some weakening is anticipated as Karen approaches the Gulf Coast but the storm could still be near hurricane strength at landfall," the forecasters said.
A tropical storm watch was in effect in Louisiana from Grand Isle west to Morgan City, and for New Orleans, Lake Maurepas and Lake Pontchartrain. Tropical storms carry winds of 39 mph to 73 mph (63 kph to 118 kph).
Heavy rains were forecast all along the northern Gulf Coast, and locally heavy rain could also affect parts of Cuba and Mexico's Yucatan Peninsula in the next couple of days, the forecasters said.
The Hurricane Center forecasters were exempt from the U.S. government shutdown because their work is vital to protecting life and property. But their parent agency, the National Oceanic and Atmospheric Administration, advised that some weather satellite images available to the public on its website "may not be up to date" because of the shutdown.
(Reporting by Jane Sutton in Miami, Kristin Hays in Houston and Mark Felsenthal in Washington.; Editing by Vicki Allen and Jackie Frank)