Brent oil prices declined to less than $108 in Asia Wednesday amid the rising concerns after the International Energy Agency cut the forecast of the global oil demand for the year due to the weakening of the economic conditions around the world.

Brent North Sea crude for December delivery declined 35 cents to $107.91 a barrel. Meanwhile, light sweet crude for the December delivery dropped 8 cents to $85.30 a barrel in electronic trading on the New York Mercantile Exchange during the Asian trading hours.

The IEA slashed its projection of oil demand for the fourth quarter of 2012 citing the continuing debt crisis in the euro zone and the impact of Hurricane Sandy in the U.S.

According to the IEA, the global oil demand in the fourth quarter will be 90.1 million barrels per day which is 290,000 barrels less than its earlier estimate made last month. Also the IEA reduced the growth forecast for 2012 by 60,000 barrels per day to 670, 000 barrels per day.

Along with the lowering of the global oil demand, the IEA cut the required supply from the Organization of Petroleum Exporting Countries by 500,000 barrels per day to 30 million barrels per day.

Adding to the worry is the fear about the U.S. facing a fiscal cliff, which consists of tax increases and spending cuts at the beginning of next year.

“Following U.S. elections the reality of the task ahead to resolve the looming fiscal cliff has cast a long shadow of markets, leaving risk assets under pressure. Despite comments from the US administration and Congressional leaders of willingness to compromise, markets remain unconvinced, especially given the unchanged underling stance of both Democrats and Republicans, the former towards taxing the wealthiest and the latter towards no tax hikes,” Credit Agricole said in a note.

Also affecting the market sentiment is the continuing uncertainty over Greece with delay in delivery in the next tranche of bailout package from the European Central Bank to the troubled economy.  In addition, there is the concern that considering the thin majority of the present Greek government, more austerity measures could prompt the collapse of the coalition and result in more instability in the country.