* Storm Ida becomes hurricane for second time

* Mexico issues hurricane watch for parts of Yucatan

* Ida seen entering energy-rich Gulf of Mexico Sunday (Updates storm becoming hurricane)

MEXICO CITY, Nov 7 (Reuters) - Tropical Storm Ida became a Category 1 hurricane again late on Saturday in the northwestern Caribbean off Mexico's Yucatan Peninsula, the U.S. National Hurricane Center said.

The Miami-based hurricane center said Ida, which first became a hurricane on Thursday off the Caribbean coast of Nicaragua before weakening over that country, reached maximum sustained winds of about 75 miles per hour (120 kph), and was about 120 miles (195 km) east-southeast of Cozumel, Mexico.

Tropical storms become hurricanes when top sustained winds reach 74 mph (119 kph).

Forecasters expected the storm to weaken as it moves into the Gulf of Mexico next week.

Skies were sunny and clear on Saturday in the Mexican resort of Cancun, and Ida is expected to pass east of the city on Sunday afternoon.

Mexico issued a hurricane watch for the Yucatan Peninsula from the resort of Tulum to Cabo Catoche, north of Cancun.

A tropical storm warning was in effect for Grand Cayman Island and for the western Cuban province of Pinar del Rio, the hurricane center said.

The Mexican government urged people to avoid unnecessary travel in the Yucatan Peninsula and imposed restrictions on coastal shipping.

Mexico's state oil monopoly, Pemex [PEMX.UL], which has extensive operations in the Gulf of Mexico, activated its hurricane contingency program but oil and gas production was unaffected, a company spokesman said.

U.S. energy companies said on Friday they were monitoring the storm's progress but had not yet begun evacuating any production platforms.

The Gulf of Mexico accounts for a quarter of U.S. domestic oil production and 15 percent of natural gas output. The Gulf Coast is also home to 40 percent of the nation's refining capacity.

Ida dumped heavy rain along Nicaragua's Caribbean coast earlier in the week, but there were no reports of fatalities. The country's coffee crop was not directly affected by the storm, according to the local coffee council. (Additional reporting by Jose Cortazar in Cancun; Editing by Peter Cooney)

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