* Moody's sees slow recovery in oil prices after 70 pct drop
* Cuts Brent, WTI price forecast to $33/bbl in 2016
* Expects to conclude review by end of Q1 (Recasts, updates throughout, changes dateline from SINGAPORE)
By Ron Bousso
LONDON, Jan 22 (Reuters) - Moody's placed scores of oil andgas companies on review for downgrade, warning of a "substantialrisk" for a slow recovery in oil prices that would compound thestress on firms already pummelled by a 75 percent drop in pricessince June 2014.
The ratings agency said on Friday it was likely to concludethe review by the end of the first quarter which could includemultiple-notch downgrades for some companies, particularly inNorth America.
Moody's also placed 55 mining companies on review fordowngrade due to the declining price of commodities.
A ratings downgrade makes borrowing more expensive forcompanies.
Moody's also cut its oil price forecasts. In 2016, it nowexpects the global benchmark Brent crude and the West TexasIntermediate (WTI) crude, the North American benchmark, toaverage $33 a barrel. This marks a $10 a barrel cut for Brentfrom its previous forecast and a $7 a barrel reduction for WTI.
Both contracts are expected to rise by $5 a barrel onaverage in 2017 and in 2018.
The sweeping global review includes all major regions andranges from the world's top international oil and gas companiessuch as Royal Dutch Shell and France's Total to 69 U.S. exploration and production (E&P) and services firms.
It nevertheless does not include the two top U.S. oilcompanies ExxonMobil and Chevron.
"We see a substantial risk that prices may recover much moreslowly over the medium term than many companies expect, as wellas a risk that prices might fall further," Moody's said.
The reviews reflect not only oil prices falling to theirlowest since 2003 but also weakening global demand and aprolonged period of oversupply that will "significantly stressthe credit profiles of companies in the oil & gas sector."
"Even under a scenario with a modest recovery from currentprices, producing companies and the drillers and servicecompanies that support them will experience rising financialstress with much lower cash flows," it said.
Energy companies' balance sheets and share prices have beenhammered over the past 18 months, leading so far to a relativelylimited number of bankruptcies. Companies have however beenforced to cut thousands of jobs, scrap new projects and slashspending in a way not seen in at least three decades.
Rival credit rating agency Standard & Poor's signalled in aninterview on Friday that oil-exporting countries also face freshdowngrades and that it could repeat last year's move when itmade a big group of cuts all at once.
In one of the steepest price falls in history, crude oilprices have lost some 75 percent since mid-2014 to near$30 per barrel as producers around the world pump 1 million to 2million barrels of oil every day in excess of demand in a war ofdiscounts for market share.
Multi-notch downgrades are particularly likely among issuerswhose activities are centred in North America, where natural gasprices have declined dramatically along with oil prices, Moody'ssaid. (Additional reporting by Henning Gloystein in Singapore,editing by David Evans)
