I used to able to earn free credits by watching advertisements but I can no longer see the option to do so. Has it been removed, ie no free credits can be earned by watching advertisements, or has it moved elsewhere, ie outwith the credits section?

It's in the same place when you open the "Credits" menu option.
You may need to wait for Google to load ads which are available in your region.

It has definitely disappeared tor me for some strange reason Thank you for trying to help.

Could be that Google does not have anything available in your region. The sniper can't control it because up to Google what to show.
Try it at a different time of the day.

I used to be able to see the watch advertisements option even when no adverts were available. It's just not there anymore no matter what time I try to find it, whether thats morning, noon, afternoon, night or even in the middle of the night. Not to worry - life goes on.