Ernesto was projected to reach hurricane strength early next week and to enter the Gulf of Mexico on Tuesday or Wednesday but it was too soon to predict whether it would hit the United States, said Robbie Berg, a forecaster with the hurricane center in Miami.
"At this early stage, the message we want to send to people is not to panic but to watch it," said Jamie Rhome, another specialist at the hurricane center.
Jamaica, which stood straight in the storm's path, issued a tropical storm watch, and Haiti issued a tropical storm watch for its southern coast.
The storm was on a course that would bring it over Jamaica by Sunday afternoon, dumping heavy showers. Fishermen were warned to return to shore and Prime Minister Portia Simpson Miller met with disaster agencies to make preparations.
Ernesto has the "potential to turn into an hurricane, so we must be on the alert for storm surges and damage to property," said Nadine Newsome, of the Office of Disaster Preparedness and Emergency Management which provided hurricane survival tips to locals living in four parishes that are prone to suffer extensive damage when it rains.
The Cayman Islands' National Hurricane Committee said a tropical storm alert for the islands would go into effect at 9 p.m. EST (0100 GMT) meaning the storm should hit the British territory within two days. The local weather service projected that tropical storm force winds would hit some areas starting late Sunday.
People were told to complete their weather preparations on Saturday.
"The essential message to the public is to continue to monitor the system carefully, listen to local media," said Education Minister Alden McLaughlin.
One resident, Jacky Kennett, who moved to Cayman with her family from the United Kingdom a year ago, was preparing for what could be her first hurricane.
"I went and put fuel in the car, got some money out of the bank, and stopped at the grocery store yesterday to stock up," said Kennett, 47. "I don't want to over react or anything, but I am worried."
Fears that the storm could damage offshore energy facilities in the Gulf of Mexico sent oil and natural-gas prices higher. Oil producers operating in the Gulf said they were prepared to evacuate nonessential personnel if needed.
Max Mayfield, the National Hurricane Center director, said it was too early to say if the storm would hit the U.S. Gulf Coast, which is still recovering from last year's Hurricane Katrina.
"It's too early to pinpoint one specific location but I think message is, especially to the folks that are in temporary housing, these 115,000 families, mostly in the FEMA trailers, they need to watch this carefully," Mayfield told CNN's Wolf Blitzer. "We've got some time. We don't want people to get too excited about this, but they certainly need to be watching it."
At 8 p.m. EST Friday, Ernesto had maximum sustained winds near 40 mph with higher gusts. The fifth named storm of the Atlantic hurricane season was centered 285 miles south-southeast of Santo Domingo, Dominican Republic, and 600 miles east-southeast of Kingston, Jamaica.
The storm was moving west-northwest at nearly 15 mph. It was expected to bring rain to Puerto Rico, the Dominican Republic, Haiti, Jamaica and the Netherlands Antilles.