* One dead in Rockport, Texas, mayor says
* Harvey weakens to tropical storm, threatens widespread floods
* Hit Texas as Category 4 hurricane late Friday
* Buildings damaged, towns flooded on coast
* Utilities report 220,000 customers without power (Adds rainfall estimate for Houston in paragraph 5, NHC quote in paragraph 6, other details)
ROCKPORT, Texas, Aug 26 (Reuters) - The most powerful storm to hit Texas in more than 50 years has killed at least one person and is now threatening catastrophic flooding as search and rescue teams deploy to the hardest-hit zones, authorities said on Saturday.
Harvey slammed into Texas, the heart of the U.S. oil and gas industry, late Friday as a Category 4 hurricane with winds of 130 miles per hour (209 km per hour), making it the strongest storm to strike the state since 1961.
It ripped off roofs, snapped trees, and triggered tornadoes and flash floods, and cut power to nearly a quarter of a million people. It also curtailed a large portion of America's oil and fuel production, prompting price hikes at the pumps.
Harvey has since weakened to a tropical storm, but is expected to lash Texas for days as it lumbers inland, bringing as much as 40 inches (102 cm) of rain to some areas, and affecting heavily populated.
Houston could receive as much as 2 to 3 inches of rain per hour overnight, Mayor Sylvester Turner said late on Saturday. The National Hurricane Center described the rain forecast for the state as potentially "catastrophic."
"Rainfall measured in feet rather than inches can certainly create a catastrophic flood," spokesman Dennis Feltgen said.
One person died in a house fire in the town of Rockport, 30 miles (48 km) north of the city of Corpus Christi, as Harvey roared ashore overnight, Mayor Charles Wax said in a news conference on Saturday, marking the first confirmed fatality from the storm. Another dozen people in the area suffered injuries like broken bones, another official said.
The town took a direct hit from the storm and had streets flooded and strewn with power lines and debris on Saturday afternoon. At a recreational vehicle sales lot, a dozen vehicles were flipped over and one had been blown into the middle of the street. By Saturday evening, a convoy of military vehicles had arrived in the Rockport area with people and equipment to help in the recovery efforts, and town officials announced an overnight curfew for residents.
"It was terrible," resident Joel Valdez, 57, told Reuters. The storm ripped part of the roof from his trailer home at around 4 a.m., he said as he sat in a Jeep with windows smashed by the storm. "I could feel the whole house move."
Before the storm hit, Rockport's mayor told anyone staying behind to write their names on their arms for identification in case of death or injury. A high school, hotel, senior housing complex and other buildings suffered structural damage, according to emergency officials and local media. Some were being used as shelters.
Texas Governor Greg Abbott on Saturday said he was activating 1,800 members of the military to help with the statewide cleanup, while 1,000 people would conduct search-and-rescue operations.
The streets of Corpus Christi, which has around 320,000 residents, were deserted on Saturday, with billboards twisted and strong winds still blowing. City authorities asked residents to reduce use of toilets and faucets because power outages left waste water plants unable to treat sewage.
Elsewhere, the Texas Department of Criminal Justice said it was forced to evacuate some 4,500 inmates from three state prisons near the Brazos River because of rising water. Texas utility companies, meanwhile, said 220,000 customers were without power for an indefinite period of time.
The U.S. Coast Guard said it had rescued 20 people from distressed vessels on Saturday, and was also monitoring two Carnival Corp cruise ships carrying thousands of people stranded in the U.S. Gulf of Mexico due to the effects of the storm.
Harvey was a Category 4 hurricane on the Saffir-Simpson scale when it hit the coast, the second-highest category, and the most powerful storm in over a decade to come ashore anywhere in the mainland United States.
HEADING INLAND, STORM WEAKENS
Harvey weakened to tropical storm from hurricane strength on Saturday, the U.S. National Hurricane Center said. The center of the storm was barely moving and was less than 150 miles (240 km) from Houston with sustained winds of 60 mph.
Houston, the fourth most populous city in the United States and home to a third of the 6 million people that could be impacted by Harvey, has gotten about 16 inches of rain so far, and will receive 2 to 3 more feet in the coming days, Mayor Sylvester Turner said Saturday afternoon.
"This is serious," Turner said in a televised interview as Harvey turned into a tropical storm expected to linger over the mid Texas coast. "It is important that people stay off the roads." Turner said the city, which has faced flooding in recent years during smaller storms, is prepared for what he described as a "major water event."
Other authorities warned of the potentially life-threatening impact of heavy rains between Houston and Corpus Christi over the next several days.
The latest forecast storm track has Harvey looping back toward the Gulf of Mexico coast before turning north again on Tuesday.
"This rain will lead to a prolonged, dangerous, and potentially catastrophic flooding event well into next week," the National Weather Service said.
The size and strength of Harvey dredged up memories of Katrina, the 2005 hurricane that made a direct hit on New Orleans as a Category 3 storm, causing levees and flood walls to fail in dozens of places. About 1,800 died in the disaster made worse by a slow government emergency response.
U.S. President Donald Trump, facing the first big natural disaster of his term, signed a disaster proclamation on Friday.
He met with his cabinet and staff on Saturday to discuss the federal reaction to the storm, according to a White House statement.
"President Trump emphasized his expectations that all departments and agencies stay fully engaged and positioned to support his number one priority of saving lives," according to the statement.
GASOLINE PRICES SPIKE
Utilities American Electric Power Company Inc and CenterPoint Energy Inc reported a combined total of around 240,000 customers without power.
Several refiners shut down plants ahead of the storm, disrupting supplies and pushing prices higher. Many fuel stations ran out of gasoline before the storm hit, and the U.S. Environmental Protection Agency loosened gasoline specifications late on Friday to reduce shortages.
The American Automobiles Association said pump prices rose 4 cents in four days in Texas to reach $2.17 a gallon on Friday.
Disruptions to fuel supply drove benchmark gasoline futures to their highest price in four months.
More than 45 percent of the country's refining capacity is along the U.S. Gulf Coast, and nearly a fifth of the nation's crude is produced offshore in the Gulf of Mexico.
Just under 25 percent of Gulf output, or 429,000 barrels per day (bpd) had been shut in by the storm, the U.S. Bureau of Safety and Environmental Enforcement said on Saturday.
(Additional reporting by Jessica Resnick-Ault, Jarrett Renshaw, Taylor Harris, Devika Krishna Kumar and Sophia Kunthara in New York; Liz Hampton, Ernest Scheyder, Marianna Parraga, and Ruthy Munoz in Houston; Writing by Simon Webb and Richard Valdmanis; Editing by Matthew Lewis and Lisa Shumaker)