(Reuters) - Tropical Storm Alex is expected to reach hurricane strength on Tuesday, with high winds and waves set to hamper BP Plc's efforts to step up containment of the largest spill in U.S. history.

Shares in British-based energy giant BP fell a further 1.75 percent in London on Tuesday after sources said the New York Federal Reserve was probing potential systemic risks posed by the company. On Monday, the company had to deny Russian government claims it was planning to sack its chief executive.

JPM Morgan Cazenove analysts said the huge fall in BP's share price, recently languishing around a 14-year low, made it a potential takeover target.

"The market has lost sight of the intrinsic value that is resident in an asset-rich company like BP. We very much doubt that keen-eyed industry players have lost sight of BP's value," JP Morgan Cazenove's Fred Lucas wrote in a research note, citing Exxon Mobil Corp and Royal Dutch Shell as the most likely bidders.

In early New York trade on Tuesday, after reports on the research note, BP's price was up over 1 percent despite a sharp fall in the overall market.

The crisis is in its 71st day with no firm end in sight. The economic and ecological costs to tourism, wildlife, fishing and other industries continue to mount for four states along the U.S. Gulf coast.

Alex was forecast to move slowly away from the Yucatan Peninsula over southern Gulf waters and curl northwest away from major oil-extraction facilities to make a second landfall in northern Mexico mid-week....[Continued, see link]