Oil plunges below $51

Crude hits 19-month low after Saudi minister says cuts working, no need for an emergency OPEC meeting.

LONDON (Reuters) -- Oil prices plunged more than 3 percent back near $51 a barrel Tuesday after Saudi Arabia said OPEC production cuts were working well and that there was no need for an emergency meeting of the producer group.
U.S. light crude for February delivery tumbled $1.78 to $51.21 a barrel after touching $50.93, the lowest since May 2005, in earlier New York Mercantile Exchange trading. In London, Brent futures shed 82 cents to $52.30.
The price of crude has plunged more than 16 percent this year in part due to warm weather in the Northeast, the world's top heating oil market, in early January.
The selloff comes as some other commodities have come under pressure - which could lead to further selling down the road.
"We took measures in October in Doha and measures in Abuja (in December) and I believe these measures are working well. Inventories in the fourth quarter have come down ... which puts the market closer to balance," Saudi Oil Minister Ali al-Naimi said in New Delhi.
"Do not panic. Actually there is no reason for a meeting."
The Organization of the Petroleum Exporting Countries (OPEC) agreed to cut 1.2 million barrels per day (bpd) of output from Nov. 1 and then to cut another 500,000 bpd from Feb. 1.
There had been speculation OPEC could hold an emergency meeting before its next scheduled conference on March 15.
Venezuelan Energy and Mines Minister Rafael Ramirez has said oil prices had fallen "too much" and that he would favor an extra meeting.
Other commodities have also had a rocky start this year and base metals fell in early trading Tuesday before stabilizing around midsession.
"We should not underestimate the global mood on commodities," said Frederic Lasserre of SG CIB in Paris. "There is not as much appetite for commodities anymore."
He predicted oil prices would test $50 in the near term, but then fresh buying interest could emerge.
Analysts said OPEC would also brake the slide and deeper price falls could drive the cartel to implement further cuts.
"We don't really see a collapse in prices. The further it goes down, the more hesitant the market will be about going even further," said Eoin O'Callaghan of BNP Paribas. "OPEC still has an impact on the market."
Stocks of oil majors fell across the board Tuesday.
Shell (down $0.41 to $67.40, Charts) lost 0.6 percent;
Exxon Mobil (down $1.09 to $71.57, Charts) slid 1.4 percent;
ConocoPhillips (down $1.02 to $62.81, Charts) retreated 1.4 percent;
BP (down $1.52 to $63.12, Charts) was down 2.2 percent.