HATTERAS ISLAND, N.C.,  (Reuters) – Hurricane Earl  began to strafe North Carolina’s barrier islands with dangerous  surf and winds yesterday as it spun parallel to the U.S. East  Coast on a northward trek toward New England and Canada.

Earl was downgraded to a Category 2 storm on the five-step  Saffir-Simpson scale of intensity and had top sustained winds  of 110 mph (165 kph) after weakening on Thursday from its  Category 4 peak, the U.S. National Hurricane Center said.

Additional weakening was expected but Earl was still a  large and strong hurricane, the forecasters said.

As oil refineries, exploration and drilling platforms, and  nuclear power plants along the Atlantic seaboard monitored  Earl’s path, EnCana Corp said it suspended drilling and pulled  personnel from a Nova Scotia rig in Canada.

Exxon Mobil said it had pulled nonessential staff from its  Sable field in offshore Nova Scotia.

At least 100,000 people were ordered to evacuate from North  Carolina’s Outer Banks islands as Earl bore down on the  Atlantic shore. It was about 160 miles (260 km) south-southeast  of Cape Hatteras at 8 p.m. EDT 0000 GMT).

It was due to pass near the Outer Banks overnight, making  its closest approach near Cape Hatteras around 2 a.m. EDT (0600  GMT) today, before turning gradually northeast to sweep up  the East Coast today and into Canada tomorrow.

“Even if the center of Earl remains offshore,  hurricane-force winds are expected to occur in the Outer Banks  by tonight,” the hurricane center forecasters said.  “Tropical-storm-force winds will likely reach the coast from  Virginia northward to Massachusetts on Friday.”

The U.S. Census Bureau estimated 26 million people in  coastal counties from North Carolina to Maine could feel Earl’s  effects in the next two days.

While a direct U.S. landfall was not forecast, Earl was due  to deliver a stinging blow to the North Carolina coastline and  farther northward before the Labor Day holiday weekend marking  the end of the summer vacation season.

Forecasters warned that hurricane-force winds from Earl  extended out 70 miles (110 km) from its center, so it would not  need a direct landfall to inflict damage from strong wind and  high seas.

The U.S. Energy Information Administration said about 1.1  million barrels per day (bpd) of oil refining capacity lies in  the likely U.S. affected area.

Breaking waves 15 feet (4.6 metres) or higher were expected  along North Carolina’s Outer Banks, picturesque barrier islands  that jut out into the Atlantic and are frequently smacked by  hurricanes and storms.

Earl was one of the biggest storms to  menace the state since Hurricane Floyd killed more than 50  people in North Carolina in 1999.

On Ocracoke Island, charter boat captain Ryan O’Neal, 31,  said he was staying put with his dog despite an evacuation  order. He spoke as the last ferry off the island, accessible  only by boat, left on Thursday morning.

“I’ve been here for every hurricane since I was born. This  one may be bad, but I’m sure we’ve had worse. I’ve got to watch  out for my house and boat,” O’Neal said.

Watches and warnings were posted along the Atlantic coast  for North Carolina, Virginia, Maryland, Delaware, New Jersey,  New York, Connecticut, Rhode Island, Massachusetts, Maine and  parts of Canada’s Nova Scotia and New Brunswick provinces,  alerting residents hurricane and tropical storm conditions were  possible in the next day or so.