LONDON (Bloomberg) ? Citigroup Inc. cut its earnings estimates for oil-tanker companies including Bermuda-based Frontline Ltd., the world's second-largest, because an expansion in fleets is hurting freight rates.

"With OPEC production remaining the main driver of tanker demand and with supply continuing to grow at a rapid pace, we see little room for optimism in the near and medium term," New York-based Citigroup analyst John Kartsonas said on Friday in a report.

The global fleet of oil tankers grew 4 percent last year with the delivery of 11.3 million deadweight tons of new capacity from shipyards, according to Drewry Shipping Consultants Ltd. in London. The Organisation of Petroleum Exporting Countries reduced oil supply by 900,000 barrels a day in the fourth quarter to buoy crude prices, Kartsonas said.

Citigroup, the biggest US bank, reduced its fourth- quarter 2006 earnings-per-share forecast for Frontline by 10 cents to 70 cents. Citigroup cut its estimate for New York-based General Maritime, the third-largest US- based tanker owner, by 14 cents to 71 cents and for Tsakos Energy Navigation Ltd. of Athens by 12 cents to $1.55.