Global oil balances look tighter due to supply outages and stronger demand, pulled up in part by substitution for increasingly higher natural gas. However, fundamentals suggest a slowing and leveling off in inventories, ending the steep stock draw since mid-year and implying less support for oil prices for the next few months, although risks remain to the upside. The US has been adding to crude inventories in recent weeks, reflecting that the impact of Storm Ida is abating, although refineries are slow in returning. Asia, US and Western European demand growth in 2022 is expected to surpass pre-pandemic levels. For the rest of the world, a solid return to 2019 levels is not expected until 2023. Road traffic continues to drive the oil demand recovery. Crude oil prices resumed their rally as the market considered it unlikely that the US Department of Energy would release oil from the Strategic Petroleum Reserve or ban exports to ease tight supplies. The oil production recovery in the US Gulf of Mexico and widening Brent-West Texas Intermediate spread should boost US crude oil exports in the coming weeks. Global mobility averaged 8.1 percent below pre-pandemic levels in most of the world’s top oil users, excluding China, in the week to Sept. 30 according to Google data, as key economies continue to recover, lending further support to oil prices, Platts reported. Refining margins declined in the Atlantic Basin, due to weakness in the top section of the barrel with the end of the driving season and as the hike in natural gas prices increased operational costs. In Singapore, margins gained against Dubai supported by a strong performance at the middle and bottom sections of the barrel amid low product flows out of China. The continued rise of natural gas prices in major trading hubs to record high levels will remain a major factor of support to oil prices in the coming weeks. Refiners fully exposed to gas prices will see margins lower, pushing them down close to 2020 levels and inducing some to cut runs. A seasonal decline in global refinery throughput during the maintenance season could be slightly offset by additional oil demand due to its substitution of natural gas, specifically in the power sector. OPEC+ reconfirmed its production adjustment plan to increase output by 400,000 barrels per day in November, according to a press statement following the 21st OPEC and non-OPEC Ministerial Meeting. Aramco adjustments to November loading-cargo official selling prices of all grades were perceived by observers to be in line with market expectations to accommodate increased allocations. The pricing offsets to the benchmarks were fairly priced to refiners. Cuts on the lighter crudes to Asia were less than heavier grades due to improved naphtha cracks on supportive olefin margins and seasonally easing oil burn in the fourth quarter. Supply chain bottlenecks can add additional pressure, and higher interest rates could disincentivize borrowing and capital injection into upstream projects, which would extend the supply crunch into the medium term. Faster recovery in oil demand will remain a decisive element in shaping the overall market outlook.