Oil prices fell more than $3 on Wednesday after a larger-than-expected build in U.S. heating and diesel stocks soothed worries about a winter fuel deficit.

U.S. crude futures dipped $3.64 to $45.49 a barrel on the New York Mercantile Exchange (search).

After months of fears about global supply constraints at a time of surprisingly robust demand, traders' concerns have for the moment crystallized around heating oil supplies in the United States.

Those concerns were tempered on Wednesday after the Energy Department (search) reported that the nation's supply of distillate fuel, (search) which includes heating oil, grew by 2.3 million barrels last week to 117.9 million barrels. Just under half of that increase came in the form of high-sulfur distillate used for heating oil. Heating oil futures sank 8.53 cents, or 6 percent, to $1.333 per gallon on Nymex.

Despite last week's supply increases, distillate inventories are still 13 percent lower than the same period a year ago and assuming colder temperatures arrives, naturally driving up demand, it will become harder to close the year-on-year supply gap.

"Refiners are doing everything possible to try to recover from these low stock levels," said Tom Bentz, a broker at BNP Paribas Commodity Futures in New York.

The latest Energy Department report showed refiners' increased their distillate fuel production last week by 2 percent, compared with a year ago, and that helped "open the flood gates," Bentz said. "There is a lot of selling going on."

While there's no likelihood of fuel shortages, traders say a cold snap in North America could deplete stocks further and spur higher rises. But for now the demand on heating oil inventories seems limited. It is the strong demand for diesel by the trucking industry that is putting the most pressure on distillate fuel supplies, analysts say.

"It's still pretty mild, you know," said Esa Ramasamy, oil editorial manager for energy reporting agency Platts in Singapore. "At this time of year, it should be snowing and it should be pretty cold already."

The Energy Department reported that U.S. crude oil inventories grew by 900,000 barrels last week to 293.3 million barrels, or nearly 10 million barrels higher than a year ago.

Nymex crude futures are now more than 50 percent higher than a year ago and would have to surpass $90 to match the inflation-adjusted peak price of 1980.