Oil futures kicked off October and the fourth quarter on a down note, feeling pressure from expectations for increased supply as traders continued to look past an escalation of tensions in the Middle East.

Oil prices were steady on Tuesday as the prospect of additional supply entering the market amid lacklustre global demand growth offset concerns that the escalating Middle East conflict could disrupt exports in the key producing region.

Israel launched a ground offensive against Hezbollah targets in southern Lebanon on Tuesday in a marked escalation of tensions in the Middle East — and the energy markets largely shrugged. The indifference is significant because the Middle East is a huge producer of crude oil — pumping one-third of the world's supply — so any geopolitical tension in the region could spark some sort of meaningful price gain.