“A low point could be in the first quarter,” Dudley said in BBC radio interview broadcast on Saturday.
Brent crude prices fell by 34 percent last year after shedding 48 percent in 2014. The plunge in global oil prices has pushed inflation close to or below zero in many countries, helping consumers but wrong-footing central banks.
Dudley said a more natural balance between supply and demand could come back in the third and fourth quarter of this year, after which stock levels could start to wear off.
“Prices are going to stay lower for longer, we have said it and I think we are in this for a couple of years. For sure, there is a boom-and-bust cycle here,” Dudley said.
Dudley also said he did not agree with Bank of England Governor Mark Carney’s use of the term “stranded assets” to describe oil and gas reserves held by companies but which may prove unviable as the world moves to a low-carbon economy.
Carney used the phrase in a speech in September in which he called on companies to be more open about their “climate change footprint” to avoid abrupt changes in asset prices that could destabilise markets.
“I think the term overstates it quite frankly and I have spoken to the governor about it and I have questioned that term,” Dudley said in the interview.
BP shareholders were already aware of the viability of the company’s assets which were only counted as reserves if they were economic, he said.