* U.S. crude stockpile rise sharply in latest week - API
* Trump shifts rhetoric, warns virus is getting worse
* Iraq's oil exports rise in July
* Coming up: EIA inventory data at 1430GMT
By Jessica Jaganathan
SINGAPORE, July 22 (Reuters) - Oil prices fell on Wednesday
as industry data showed a bigger- than-expected inventory build
in the United States where coronavirus cases continue to climb,
potentially further denting demand in the world's biggest oil
consumer.
In his first briefing in months focused on the pandemic,
U.S. President Donald Trump said that the outbreak would
probably get worse before it gets better, one of his first
recent acknowledgements of the spread of the problem.
Industry group American Petroleum Institute (API) reported
U.S. crude inventories rose last week by 7.5 million barrels
compared with expectations for a draw of 2.1 million. API/S
Brent crude LCOc1 fell 32 cents, or 0.7%, to $44 a barrel
by 0156 GMT, and U.S. West Texas Intermediate (WTI) crude CLc1
dropped 33 cents, or 0.8%, to $41.59.
Oil prices climbed about $1 the previous day, reaching their
highest since March 6.
"Crude's rally hit a brick wall after the API report showed
a sharp rise in stockpiles and on President Trump's warning that
the coronavirus pandemic in the U.S. is likely to worsen," said
Edward Moya, senior market analyst at OANDA in New York.
"The crude demand outlook just got a double whammy with what
could be the biggest rise in stockpiles since late May if
confirmed by the EIA report tomorrow and on Trump's downbeat
virus briefing."
The U.S. Energy Information Administration (EIA) will
release official oil inventory data later on Wednesday. EIA/S
Economic data from Japan, the world's fourth-largest oil
consumer, also weighed on prices. Factory activity contracted
for a 15th straight month in July, indicating lower economic
activity because of the pandemic is extending into the third
quarter. Oil prices rose on Tuesday on optimism for a COVID-19
vaccine and after European Union lenders agreed on a 750
billion-euro ($859 billion) fund to prop up coronavirus-hit
economies.
Still, the effect of those funds on prompt oil prices will
be mute as it may take months to start flowing and the impact
may take years to show, Stephen Innes, chief global markets
strategist at AxiCorp said in a note on Wednesday.
There are also signs that Iraq, the second-largest producer
in the Organization of the Petroleum Exporting Countries (OPEC),
is still not meeting its target under an OPEC-led supply cut
deal. Southern Iraqi exports in the first 20 days of July averaged
2.70 million bpd, according to data from Refinitiv Eikon and two
industry sources, equal to official data for exports in all of
June.