John Kilduff: Gas at $3.50/Gallon in October

CNBC analyst John Kilduff does not share the wide view that gas prices are soon going to reach the $4 level per gallon this summer. If anything, he believes they subside to pre-presidential-election levels that are likely to favor incumbent Obama's bid for reelection. "National average is right now at $3.85 a gallon. I would say by then we should be lower. Let's put it at $3.50 by then, if not lower," says Kilduff, noting that we may avoid the $5-dollar bullet by a long shot. "The PMIs we are seeing today, the China slowdown should be critical to oil prices getting lower. The european zone problem as well, and again the production story..." The production story Kilduff speaks off refers to the increased supply levels from Libya, who is now back at pre-conflict levels; Iraq, which has pledged to fill a hole brought by a potential closure of Hurmuz; and Shale oil in the US. Kilduff was particularly impressed by Iraq's steps to reassure oil markets on the backdrop of an Iran conflict: "Disclosing how much storage they have of oil, that is sitting ready to be landed onto vessels, both in the country and around the world, they are prepared to step in big time." he says. "This whole thing is turning right now wholly on the Iranian situation," Kilduff says of the sharp spike in gas prices of late. " We do not really know what the outcome is going to be. Right now we are all planning for a conflitct if it isn't going to be resolved by the summer. So that would change everything. So I am assuming in that number that there is no armed conflict with Iran over nuclear ambitions."