Moody’s has placed 175 oil, gas and mining companies on review for a downgrade due to a prolonged rout in global commodities prices that it says could remain depressed for some time.

Warning of possible downgrades for 120 energy companies, the rating agency said there was a “substantial risk” of a slow recovery in oil that would compound the stress on firms already pummelled by a 75 per cent drop in prices since June 2014. A ratings downgrade makes borrowing more expensive for companies.

Moody’s also cut its oil price forecasts. In 2016 it now expects benchmark Brent crude and West Texas Intermediate (WTI) crude, the North American benchmark, to average $33 a barrel. This marks a $10 a barrel cut for Brent from its previous forecast and a $7 a barrel reduction for WTI. – (Reuters)