Preheat oven to 350°F. Heat a medium-size, deep skillet over medium heat. Add oil and butter. When butter melts into the oil, add flour and combine. Gently cook, whisking flour and butter together, until smooth and flour has had a chance to cook, about 3 minutes. Slowly add milk while continuing to whisk. Gently bring milk to a bubble while stirring frequently. Allow the milk to thicken a bit, then stir in cheese a handful at a time. Season sauce with nutmeg and cayenne. Add salt, to taste. Fold in cooked pasta to sauce.
Meanwhile… spray cupcake tins with cooking spray and place one piece of pancetta into the mold of each cup, forming it into a cup shape. Bake 3 minutes, until golden and slightly crispy.