This paper proposes a probabilistic small signal stability assessment (PSSSA) methodology based on the application of Monte Carlo approach for iterative evaluation, via modal analysis of small signal stability (SSS). Operation states represented by random values of generation and demand are analyzed. A probabilistic instability risk index based on cumulative probability distribution function of damping ratios of oscillatory modes is calculated, as well as a power system stabilizer (PSS) devices location index based on eigenvectors and participation factors, which are considered random variables. Moreover, the impact of long-distance power flows on oscillatory modes (OM) and how the damping of OM depends on the orientation and magnitude of power flows is investigated. Further, an additional index concerns qualitatively the determination of transfer capability as affected by small signal stability. PSSSA is tested on a reduced order model of New England-New York's interconnected system considering uncertainties around three different system conditions separately: highly loaded, fairly loaded, and lowly loaded. The results highlight the main advantages of PSSSA over deterministic SSS studies such as instability risk assessment, small signal stability enhancement through adequate PSS location, and the proposal of possible restrictions for transfer capability in order to avoid poorly damped oscillations in the face of the diversity in power system operation.