My diet is high in fatty foods. could this be why i have oil in stool water?

Steatorrhea: Two things are likely at play here: (1) the high fat content of your diet, and (2) the likelihood that your body has a problem absorbing the fat in your diet. It's unlikely that you're overwhelming your fat-absorptive mechanism with dietary fats, so there may be an absorption issue here as well. You should see a GI doctor for relevant diagnostic testing.