First, you need to melt your marshmallows together with the oil and possibly food coloring (if you omit the food coloring, your fondant will be white). This is done in a water bath: Place water in a pot and bring it to a boil. Place a bowl (glass or metal) with the aforementioned ingredients on top of the pot. The bowl should be larger so that steam does not escape from the pot. Turn the heat down, so the water just simmers.

Stir the mixture until it melts together. I used a spatula for this.

Remove the bowl from the heat and gradually add powdered sugar while stirring well.

Continue until the dough is elastic and no longer sticky, somewhat like regular dough.

Put powdered sugar on the table and knead it well with your hands. It should not become too dry; it should resemble modeling clay.

Now you have free rein regarding what you want to do with your fondant:

Roll it out thinly (square or round) and cover a cake with it.

The fondant is relatively easy to work with, so you can shape figures.

If you want to create different colors as I did, make several batches with individual colors.