By Ikuko Kurahone
LONDON (Reuters) - Oil retreated from a year-high above $78 touched early on Friday after a renewed focus on brimming inventories and disappointing corporate earnings chipped away at bullishness across financial markets.
U.S. crude oil futures fell 42 cents to $77.16 a barrel by 1155 GMT (7:55 a.m. EDT), off a session high of $78.17, the highest since October last year.
Brent crude was down 62 cents at $75.61.
On Thursday, oil prices rose for a sixth straight session after an expectedly large weekly fall in U.S. gasoline inventories and a rally across equity markets to year-highs following Goldman Sachs' earnings.
But absolute levels of crude oil and refined products in the United States, the world's top energy market, were still much higher than a year earlier.
"If you look at the stock situation you will not be buying. There is still an awful lot of stocks," Rob Montefusco, an oil trader with Sucden Financial in London, said.
Closely watched earnings results from Bank of America
European shares turned negative and Wall Street was likely to fall at the opening, while the dollar edged up.
Investors have shifted money to oil futures and other relatively risky assets in tandem with falls in the value of the U.S. dollar, which as the international reserve currency was viewed as a comparatively safe haven during the depths of financial crisis.
A weak dollar also makes dollar-denominated commodities, such as oil, cheaper for non-dollar investors.
Investors await U.S. economic data due out later on Friday to see further clues for market directions.
U.S. industrial production and capacity utilization data for September was expected to show a 0.2 percent rise in production. The Reuters/University of Michigan Surveys of Consumers will also release its October preliminary consumer sentiment index. (Additional reporting by Jennifer Tan in Singapore; editing by Barbara Lewis and James Jukwey)
