What happen when carbon monoxide mixed with oxygen? how it can reduce amount of oxygen?

1. What happen when carbon monoxide mixed with oxygen?
CO2 + O2 : nothing special. As the previous responder said, this is a common mixture in our lungs and in the air we breathe. Carbon dioxide will not react with oxygen, because it is already completely oxidized.
Under normal conditions of temperature and pressure, again, nothing special -- from here you'd separate out the hydrogen as a fuel source. However, the reaction is reversible, and once you got past the activation energy, the reaction to form water and carbon is exothermic, and could be potentially dangerous if contained.