Oil retreated from a year-high above $78 touched early on Friday after a renewed focus on brimming inventories, disappointing corporate earnings and a slip in consumer confidence chipped away at bullishness across financial markets.

U.S. crude oil futures fell 27 cents to $77.31 a barrel by 1422 GMT (10: 22 a.m. EDT), seesawing between a session high of $78.17, the highest since October last year, and a low of $77.00.

Brent crude was down 47 cents at $75.76.

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.

European shares slipped and Wall Street hit a session low as a survey showed an unexpected worsening of U.S. consumer sentiment, following closely watched earnings results from Bank of America , which disappointed investors.

The Reuters/University of Michigan Surveys of Consumers said its preliminary index of sentiment for October fell to 69.4, from September's 73.5, due to a dismal state of personal finances.

Bank of America reported a loss of $1 billion for the third quarter.

The dollar inched up from 14-month lows against a basket of currencies.

The U.S. dollar, 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 and a stronger dollar often prompts the opposite money flow.

In the general trend so far this year, investors have shifted money to oil futures and other relatively risky assets in tandem with falls in the value of the dollar. (Additional reporting by Jennifer Tan in Singapore; editing by Barbara Lewis and James Jukwey)

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