Hurricane Bill headed west-northwest over the open Atlantic Tuesday on a path toward Bermuda that would likely keep it clear of the U.S. East Coast but could spell trouble for Canada's Maritime Provinces.

Bill's top winds grew to 105 miles per hour (170 km per hour) and the Category 2 storm was expected to become a major Category 3 hurricane in the near future, the U.S. National Hurricane Center said.

The Atlantic season's first hurricane posed no threat to the U.S. Gulf of Mexico oil-producing area, but its curving path was expected to take it just west of Bermuda, a mid-Atlantic British territory and reinsurance capital, by Saturday.

Hurricane expert Jeff Masters, founder of the Weather Underground website, said he expected Bill to move between Bermuda and the U.S. East Coast toward Canada's Maritime Provinces.

I think the likely main impact (on the U.S. coast) is going to be beach erosion and coastal waves, he said. Direct impacts are unlikely.

Bill will encounter energy-sapping cool water when it reaches the latitude of North Carolina but could still be a Category 1 hurricane near Nova Scotia and Newfoundland, Masters said.

Category 3, 4 and 5 storms on the Saffir-Simpson intensity scale are the ones likely to cause the most damage.

The hurricane center notes that long-range track forecasts -- from three to five days in advance -- have average errors of several hundred miles.

At 11 a.m. EDT/1500 GMT Tuesday, Bill was trekking through the open Atlantic about 705 miles east of the Caribbean's Leeward Islands, moving at about 16 mph to the west-northwest, the hurricane center said.

A hurricane hunter aircraft was to explore the storm on Tuesday afternoon.

Bill could become a major hurricane within the next day or so, an NHC bulletin said.

Meanwhile, energy traders were keeping an eye on the remnants of Tropical Storm Ana, which was producing thunderstorms over Haiti, Cuba and the Bahamas.

The NHC forecast that the storm front had a low chance -- less than 30 percent -- of becoming a tropical cyclone again over the next 48 hours.

One forecaster, AccuWeather.com, said it was unlikely but possible the system could regenerate over the eastern Gulf later in the week. Some forecasters noted that Ana had already regenerated once.

Energy markets watch storms in the Gulf of Mexico closely because the region produces a quarter of U.S. oil and 15 percent of its natural gas.

Canada Hurricane Target