In the cells of the human body, oxygen molecules are used directly in a process that (1) releases energy (2) digests fats (3) synthesizes carbohydrate molecules (4) alters the genetic traits of the cell

The answer is (1)

In the cell of the body, oxygen is used in a process that releases energy. Oxygen is used in the last and most important step in cellular respiration namely the electron transport chain.

In this process electrons are passed from one electron carrier to another and as they are  thus transferred, energy is released. Toward the final step, electrons are transferred  to oxygen which is the final acceptor of the electrons. By the time the process ends, 34 ATP molecules are produced.