Record pump prices over a Labor Day weekend are normally read as a demand story: too many drivers, not enough barrels. That reading works for most of the country. It does not work for the West Coast, where the price spread over the Gulf Coast has been widening for reasons that have nothing to do with how many people drove somewhere. California is short of refineries, and it is running out of ways to hide it.
The structural fact almost nobody outside the energy desks prices properly is that California is a physical island in the American fuel system. There is no product pipeline crossing the Rockies into the state. Every barrel it consumes is either refined inside California or delivered by ship. Against that backdrop the state has been losing capacity: Phillips 66 wound down its Los Angeles refinery, and Valero moved to cease operations at Benicia. Together those two plants represent close to a fifth of California's crude processing capability. Removing a fifth of the supply from a market that cannot import by land does not raise prices a little. It changes who supplies the market.