Refining margins have pulled back from historically high levels in 2022, driven by weakness in gasoline margins in North America and a narrowing of light-heavy crude differentials due to crude production cuts by OPEC+. Demand for distillates and jet fuel continues to be strong and product inventories are at the lower end of the five year averages, which in our view supports margins as the industry enters maintenance season. Global capacity additions in Latin America, Africa, and the Middle East could be a headwind as 2024 approaches, but North American refiners are in a strong position to meet possible challenges, with robust liquidity and low financial leverage.