(Bloomberg) -- Commodities are poised to rally in 2023 as China recovers, US inflation proves to be benign, and Russian oil production contracts, according to Goldman Sachs Group Inc.’s Jeff Currie.

“The real core of the bullish view is the recovery in China,” Currie, global head of commodities research, told Bloomberg TV in an interview in Hong Kong Wednesday. “And everything is pointing to that being A-OK,” he said, sticking with a bullish view despite a soft start to the year for raw materials.

Commodities have eased in the opening weeks of 2023 despite China’s swift abandonment of Covid Zero, with crude oil among the losers. That drop has been driven by US economic data surprising to the upside, aiding the dollar; a collapse in natural gas; and rising metals inventories, according to Currie.

In oil, “what we see right now is that the market is beginning to tighten back up,” Currie said, citing a bullish, backwardated pattern in Brent. On the US outlook, “our economists think the core inflation picture is going to be relatively benign. And as a result, we continue to be very positive.”

Russian crude production was likely to contract by 600,000 barrels a day, Currie said. Moscow’s recent announcement of a half-a-million barrel a day reduction in March — which follows the imposition of additional western sanctions on energy flows — wasn’t voluntary, he added.

Goldman Sachs expects returns from commodities over 12 months of 31% based on the S&P GSCI, according to a Feb. 20 note. There’ll likely be “widespread commodity shortages” later this year, the bank said in that report.

--With assistance from Adrian Wong.

(Adds full-year forecast in final paragraph)

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