I don't usually work much with butter cream. Every time I try to color it and pipe it looks like the color and the oil/fat are separating so it looks more like a marbleish color.
What am I doing wrong?

Thanks in advance.

Try adding meringue powder to it. I have the same problem with buttercream (probably the heat and humidity) and meringue powder helps.

There are a couple of things that will make this happen. If you have an excess of minerals in your water (if that's what you're using) it can cause it, so you would remedy this by using distilled water. I've begun skipping the water and using milk or whipping cream.

Or if you add salt to your icing to cut the sweetness, it might not be all the way disolved and that will cause it. I've worked out to use pickling salt (finer grain) and I disolve it in my extracts before adding it to the icing. Some people will say salted butter will cause it too, but when I was going through this problem I didn't find that using unsalted butter helped at all.

The last thing could be using regular shortening and wilton cake colors. When I couldn't get hi-ratio shortening, I began using their candy melt colors instead of their regular ones. They're formulated to work with oil and don't sepparate. In the long run, I've found it's more cost effective to buy the hi-ratio shortening and the regular colors.

I forgot one more thing... If you already have your icing and colors made, try letting them sit over night and remixing them. Sometimes that's enough to make it come together better. But they could still separate if you hold the bag too long in your hand while piping. So have an extra bag loaded in the 'fridge and swap it with the warm one as you pipe.