You can usually replace butter with oil in baked goods like cakes (as long as you're not depending on the flavor of butter of course), but you may have to reduce the volume a little -- oil is 100% fat, but butter is only about 85% fat. (the rest is water and a bit of milk solids).
I use canola oil all the time and love how it makes the cake moist and have never had a problem with it being oily. Here is my recipe for yellow cake using canola oil https://food52.com/recipes/11618-tender-yellow-cake
Canola oil should be fine in cake, as long as the recipe originally called for oil; it cannot replace butter. If you followed the recipe as written and you find it too oily, you can experiment with reducing the oil next time.
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