Saudi Oil Minister Ali Al-Naimi said output cuts already agreed by OPEC had removed much of the world's excess supply and there was no need to panic over a steep fall in prices.
Naimi, minister of the world's top oil exporter, saw no need for OPEC to hold an emergency meeting before its next scheduled gathering on March 15 in Vienna. The best course of action for now was "to wait and look at the market", he said.
Oil dropped more than $1 after the Saudi oil minister's remarks, with U.S. crude at $51.85 -- near a 19-month low touched on Friday.
The Organization of the Petroleum Exporting countries decided in October to cut supply by 1.2 million barrels per day (bpd) from November and last month agreed a further reduction of 500,000 bpd to take effect from Feb. 1.
"I believe these measures are working well. Inventories in the fourth quarter have come down...which puts the market closer to balance," said Naimi. "I think we have succeeded very well."
The Saudi oil minister said fuel stockpiles in top consumer countries had fallen 30 million barrels in December alone.
A 15% price plunge since the start of 2007 has many OPEC producer countries deeply concerned and Venezuela calling for an emergency meeting to take further action to stem the
decline.
But Naimi said there was no cause for alarm.
"Do not panic. Actually there is no reason for a meeting," he said.
"All the fundamentals are significantly healthier than they were at the time of the Doha meeting (in October)...The market is in a healthy condition and moving in the right direction."
Nigeria's Oil Minister Edmund Daukoru backed his Saudi counterpart's call for calm.
Earlier today, he said the group that pumps more than a third of the world's oil should wait to see the effects of its February cut before taking further action.
"I think we have to take a wait-and-see (approach)," he told reporters on the sidelines of the Petrotech conference in New Delhi. "After we implement 500,000 barrels a day (cut), we have
to see how the market responds."