By Emily Chow

SINGAPORE, June 26 (Reuters) - Asia's spot liquefied natural gas price held steady this week near a four-month low, as the market stayed hopeful about a peace deal materialising in the U.S.-Israel conflict with Iran.

The average LNG price for August delivery into northeast Asia LNG-AS was estimated at $15.35 per million British thermal units (mmBtu).

"Current backwardation remains quite flat, with market pricing a return of Qatari supplies around September," said Evan Tan, an analyst at consultancy ICIS, referring to the market condition where prompt prices trade above future contracts.

"As Qatar has been cycling small volumes across their plants, a month of swift production recovery is currently expected. Safe passage navigating sea mines will also be a determining factor of how much LNG will be bottlednecked by marine traffic out of the strait," he added

While traffic through the Strait of Hormuz is rising daily, ships are mostly avoiding the central area of the waterway, with many opting to hug the Omani side of the strait.

So far, at least 10 empty LNG tankers were seen having transited westward through the strait to load at Qatar this week, the largest weekly number since the war began on February 28.

In Europe, S&P Global Energy assessed its daily northwest Europe LNG price benchmark for cargoes delivered in August on an ex-ship (DES) basis at $13.363/mmBtu on Thursday, a $0.225/mmBtu discount to the price at the TTF hub.

Argus assessed it at $13.42/mmBtu, while Spark Commodities assessed the July price at $13.302/mmBtu.

"LNG prices in Europe have remained relatively stable compared to last week as more confidence emerges in the U.S.-Iran peace deal, and the Strait of Hormuz is beginning to see increased LNG traffic," said Annemarie Pettinato, deputy head of LNG pricing at Argus.

The inter-basin arbitrage remains open for prompt loadings for August delivery as northeast Asian delivered prices have maintained a premium to Europe's, she added, weighing on the fixture of cargoes into European markets despite the heatwave.

The heatwave in Northwest Europe has pushed gas burn to its highest level since March, exceeding last year's levels, said Yahdian Falah, portfolio strategist at German-based energy trading company Trianel, adding that gas burn could revisit recent highs by mid-July.

However, this is not expected to translate into higher prices amid improving supply, with Norwegian gas exports returning to pre-maintenance levels, he added.

In LNG freight, Atlantic and Pacific rates both slipped to $89,750/day and $76,250/day respectively, said Spark Commodities analyst Qasim Afghan.

The U.S. front-month arbitrage to Northeast Asia via the Cape of Good Hope remains closed and pointing to Europe, he added, while the U.S. front-month arbitrage to Northeast Asia via Panama is open and firmly pointing to Asia.