UPDATE 5-Oil slides below $111, economic outlook drags

* Economic outlook for U.S./Europe worries

* U.S. crude stocks may have risen last week - Poll

* Saudi sees demand rising in coming months

(Updates prices)

LONDON, April 2 (Reuters) - Ample supplies and concerns over the pace of U.S. economic recovery and a wobbly euro zone economy outweighed the prospect of stronger demand in Asia to pull oil below $111 a barrel on Tuesday.

Some investors had anticipated downward pressure on prices as cooling U.S. factory activity in March suggested the world's largest economy lost some momentum at the end of the first quarter.

Brent slid 21 cents to $110.67 a barrel by 1424 GMT. U.S. crude was down 60 cents to $96.47.

"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 crude had risen to a high of $111.79 in earlier trade on the potential for stronger demand in the Far East.

Saudi Oil Minister Ali Al-Naimi said on Monday that demand for crude from Saudi Arabia is likely to rise over the coming months, in a sign the OPEC heavyweight sees a recovery in its biggest export market, Asia.

China, the world's second-largest oil consumer, imported just over 1 million barrels a day from the Kingdom last year, up more than 7 percent from 2011.

This led some in the market to expect higher prices ahead.

PEGASUS

U.S. crude also could be pushed lower by a pipeline leak in Arkansas that will cause the supply of oil to build up in the U.S. Midwest, rather than being transported to U.S. refiners on the Gulf of Mexico.

Exxon Mobil continued efforts to clean up thousands of barrels of heavy Canadian crude oil spilled from a near 65-year-old pipeline.

Exxon's Pegasus pipeline, which can carry more than 90,000 barrels per day (bpd) of crude to Texas from Illinois, is used to supply U.S. Gulf Coast refineries.

"Any kind of bottleneck will cause weakness in the mid-continent, so you could see some temporary weakness in WTI," said Tony Nunan, a risk manager at Mitsubishi Corp in Tokyo, referring to West Texas Intermediate-grade crude oil.

"But this is also the time when U.S. refineries are starting to ramp up in preparation for the gasoline season."

A Reuters poll showed that U.S. commercial crude inventories may have risen by 2.3 million barrels for the week ended March 29, while refinery use was expected to have expanded 0.5 percentage points from the prior week's level of 85.7 percent of capacity.

(Additional reporting by Luke Pachymuthu in Singapore; Editing by Tom Pfeiffer and Jane Baird)