There are several variations of this used as a science demonstration and that have also been used as part of a scam to demonstrate witchdoctor ability. It is usually based on the Leidenfrost effect, with the sources of moisture depending on the setup, but sometimes just what is on the hand. Often it is done with molten lead, which is a little hotter than fry oil.

It is one of those types of demonstrations that can be done wrong and get a person badly hurt. Someone who knows what they are doing can show novices how to do it, although there is some argument over how risky it still is.

I'm simply creeped out that the guy's putting his dirty hands in the oil he's cooking my food in...