OilPrice.com reported that Goldman Sachs is predicting that between the reopening of the Chinese economy and strengthening of global demand, oil could be set to rise above $100 per barrel this year.

By the fourth quarter of 2023, the investment bank sees Brent crude trading at $105 per barrel, as it predicts that demand for oil will rise by 2.7 million barrels per day (bpd) over 2023. The bank’s analysts warned that by the second half of 2023, the market may enter a deficit.

The news comes as Bloomberg reports that China has turned away from its strict zero-Covid policies, which had been repeatedly putting their economy into lockdowns with every handful of Covid cases discovered. Now after reopening its borders, China has announced huge oil import quotas and given 44 private refiners permission to import 111.82 million metric tons of crude.

On Monday, oil prices were up 4% as news of China’s continuing reopening spread. Analysts saw it as a sure sign global demand would continue to grow and strengthen, perhaps even causing OPEC+ to unwind its October production cut later in the year.

The investment bank warned however that if the market demand remained soft, the cartel “could stick to its October cuts or cut production even further, given its significant pricing power.”

Although most economic analysts predict there will be an economic downturn sometime in the first half of the year, perhaps even including a recession, Goldman still expects what it is referring to as a “new supercycle” to begin in commodities, which it asserts leaves them set to be the best performing class of asset in 2023.