What could cause water to be in the oil?

this is a sign of a major problem you either have a cracked head or block or a blown head gasket. there is a product called liquid glass you can use to fix this but bear in mind this is a tempoary fix at best.

However, check the water pump blades to see if they may have cut a circular hole leading water into your engine, depending on the design of the assembly. It may not be noticeable at first unless you thoroughly inspect areas wherever possible. A crack in the engine block is rare by the way.