European shares fall away at the end of a strong week

* FTSEurofirst down 0.7 percent

* Set for best week since October 2015

* Volkswagen (LSE: 0P6N.L - news) leads auto shares lower

* Allianz (Hanover: ALVN.HA - news) down after earnings, dividend miss (Adds detail)

By Danilo Masoni and Alistair Smout

MILAN/LONDON, Feb 19 (Reuters) - European shares turned lower on Friday, hit by a drop in auto shares, as investors locked in gains following a strong week that has helped to stabilise markets after a tumultuous start to the year.

The biggest losers were auto shares, down 1.3 percent, with scandal-hit Volkswagen under pressure again. The stock fell 3.7 percent after a media report that VW does not expect to reach an agreement with the United States over its rigging of emissions tests before the end of March .

By 1133 GMT, the pan-European FTSEurofirst 300 was down 0.7 percent at 1,284.68 points. The index is up 4.3 percent so far this week and set for its best week since October 2015, buoyed by a recovery in the price of oil.

But on Friday oil prices resumed their slide as a record build-up in U.S (Other OTC: UBGXF - news) . crude stockpiles stoked worries about global oversupply, and oil and gas shares were down 1.2 percent.

"At this stage ... it is still unclear if the current up-move has run its course or if this is merely a 'normal' and much needed consolidation before the next leg higher," said Markus Huber, a trader at City of London Markets.

Banking stocks also turned lower following an improved performance this week, dropping 1.1 percent.

Banks are still up 2.6 percent this week but down over 20 percent for the year, on concern over how they can protect profits in a low-interest-rate, low-growth environment.

Allianz fell 1.5 percent after the German insurer missed profit and dividend expectations and gave a 2016 operating profit target in line with analysts' predictions.

Baader Bank Helvea analyst Daniel Bischof reiterated his "hold" rating on the stock, noting net income missed forecasts because of a goodwill impairment on its life business in Asia.

Valeo (LSE: 0NR3.L - news) led gains on the FTSEurofirst, up 3.9 percent, after the French car-parts maker posted a 30 percent rise in full-year net profit and proposed raising its dividend by 36 percent.

Italian broadcaster Mediaset (LSE: 0NE1.L - news) rose 6 percent after local media reported that French media group Vivendi (Swiss: VIV.SW - news) had been discussing an acquisition of its pay-TV business. Mediaset said it was not in talks with Vivendi (LSE: 0IIF.L - news) over a sale.

Today's European research round-up ($1 = 0.6984 pounds) (Reporting by Danilo Masoni, editing by Larry King)