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$30 oil coming sooner than you think: Kilduff

U.S. crude could fall to the $30 to $40 per barrel range sooner than expected following China's yuan devaluation, analyst John Kilduff said Wednesday.

The founding partner of Again Capital made his call for $30 oil last month, but told CNBC's "Squawk Box" developments in China may have moved the timeline forward. He said he expects to see a 30 print by October, followed by a rebound that will put the cost of U.S. crude in the mid-$50s next year.

"It's coming early. It's coming fast," he said, adding that oil in the $20s is possible, but that would be an overshoot to the downside.

"We've been doing this sort of stair step lower and lower and we haven't gotten to the washout that you need in commodity markets for a real bottom to be established," he said.

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The yuan hit a four-year low on Wednesday after China allowed it to weaken further in the wake of its sudden devaluation to support the slowing Chinese economy, where industrial output grew less than expected in July.

China is the world's biggest oil consumer after the United States, and a weaker yuan erodes Chinese purchasing power for dollar-denominated imports like oil.

Oil prices initially fell Wednesday, but got support from an International Energy Agency report that concluded global demand for crude is picking up in the face of lower prices.

Kilduff said he believed oil supply could fall by 500,000 barrels per day by early next year. That may cause top exporter Saudi Arabia to conclude its policy of holding production steady to maintain market share has done its job of squeezing of U.S. shale producers. Consequently, the Saudis may finally reduce supply, he said.

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However, if and when the price rebound does occur next year, U.S. producers could ramp up production, leading to another supply glut, he said.

"Do the shale players come racing back in? Is that enough for them to get back in and put production back on?" he asked. "This could become quite a vicious cycle."

—Reuters contributed to this story.