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Please go through the below for how to change.
1 ) how can I upgrade server java
-- just download the .tar.gz and unzip it in a new directory
2 ) if I upgrade server java to jdk-8u121 will it affect the obiee because there I have used jdk-8u92
-- No, it wont affect until you change the environment variables and the config files as part of "making the OBIEE to use the new JDK"
3 ) Do I need to upgrade obiee( 12C) java to jdk-8u121 and If yes how can I do it because everytime I try to do it the node manager doesn't work
If you mean to upgrade the JDK inside $ORACLE_HOME/bi , you can still do that. It should not cause any errors to the nodemanager as long as the JDK you use is supported.
i upgraded java as you showed and its working fine but i got another problem
i was trying to apply patches to my obiee 12c but its showing the error which is " The isntallation jdk 1.8.0_92 which is the old one is not accessible
i upgraded that to 1.8.0_121 but when i am setting the environment variable for opatch it still wants the jdk 1.8.0_92 and its not the picking the new one which is 1.8.0_121so how can i make it works so that it work with the new jdk