* Economic outlook for U.S./Europe fuels demand worries
* U.S. crude stocks may have risen last week - Poll
* Saudi sees demand rising in coming months
* Coming up: API oil data 4:30 p.m. EDT Tuesday (Updates prices, price moves, paragraphs 3-4,7,9-11)
NEW YORK, April 2 (Reuters) - Oil prices fell in choppy trading on Tuesday as sufficient supply and concerns about the pace of U.S. economic growth and the euro zone economy offset any support from the prospect of stronger demand in Asia.
U.S. gasoline futures posted the biggest percentage drop in the oil futures complex, pushing below the 50-day moving average of $3.0477 a gallon, a technical level closely monitored by chart watching traders and analysts.
Brent extended its drop to more than $1 a barrel and the U.S. contract pared its losses by midday trading in New York.
U.S. crude had posted the deeper losses early on Tuesday as recent pipeline problems curbing the ability to move crude oil out of the Midwest to the U.S. Gulf Coast raised expectations inventories in the United States will increase.
U.S. light sweet crude prices have recently increased and
the price difference to Brent narrowed
"The market has no clear leadership right now," said Olivier Jakob, an analyst at Petromatrix in Zug, Switzerland. "Both crudes are under pressure, and the economic situation in Europe still looks pretty lousy."
Brent May crude fell 76 cents to $110.32 a barrel at 12:48 p.m. EST (1648 GMT), after reaching $111.79. The $110 session low put Brent below the 200-day moving average at $110.17.
Saudi Oil Minister Ali Al-Naimi saying on Monday that demand for crude from Saudi Arabia is likely to rise over the coming months had provided crude futures, especially Brent, some support.
U.S. May crude was down only 10 cents at $96.97 a barrel, after falling to $95.91.
The Brent/U.S. crude spread
Gasoline futures were down 7.65 cents at $3.0250 a gallon, having fallen as low as $3.0199.
While gasoline futures fell, U.S. heating oil rose more than a penny, as the benchmark distillate futures contract continued to attract buyers after the jumbo 4.5-million-barrel drop in stockpiles reported by the Energy Information Administration (EIA) for the week to March 22.
The EIA's report that refinery capacity use jumped 2.2 percentage points in the same week had some brokers and traders expecting refined products production to rise in coming weeks.
A stronger dollar added pressure on dollar-denominated oil prices, with the euro getting pressured by euro zone data showing the region was well into economic contraction last month.
British manufacturing also remained in contraction, and European Union (EU) data showed unemployment in February was steady at 12 percent.
The gloomy data from Europe followed Monday's report that U.S. factory activity grew at its slowest rate in three months in March, indicating a loss of momentum at the end of the first quarter.
Investors await Friday's closely watched U.S. March nonfarm payrolls report for an indication if the headwinds from a tighter fiscal policy, the sequestration or automatic spending cuts, have slowed the economy of the No. 1 global oil consumer.
PEGASUS WINGS CLIPPED
Exxon Mobil continued efforts to clean up thousands of barrels of heavy Canadian crude oil spilled in Arkansas after the rupture of a near 65-year-old pipeline.
The Pegasus pipeline, which can carry more than 90,000 barrels per day (bpd) of crude to Texas from Illinois, was shut Friday after the leak.
Arkansas has launched an investigation into the pipeline leak, with the company saying it will cooperate fully.
With the pipeline problem likely to keep crude oil bottled up in the region, analysts are expecting U.S. crude inventories to have risen last week, according to a Reuters survey, adding to stockpiles already above 385 million barrels.
The American Petroleum Institute's weekly inventory report is due at 4:30 p.m. EDT (2030 GMT) on Tuesday, with the EIA report following on Wednesday at 10:30 a.m. EDT (1430 GMT). (Reporting by Robert Gibbons in New York, Peg Mackey in London and Luke Pachymuthu in Singapore; Editing by Andrew Hay and Bob Burgdorfer)