Underground inventories of natural gas, until recently projected to finish winter at historically high levels, are widely expected to drop in coming government readings, a reflection of an extreme weather shift and huge hits to production.

Frigid blasts of Arctic air spilled into the Lower 48 late last week and spread across the country. The weather pattern delivered overnight temperatures as low as minus 50 in parts of the Midwest early this week, after accounting for wind chills, and most regions are still wrestling with freezing daytime temperatures. The conditions were projected to last through the week before a late-January thaw.

This has sent demand for natural gas to power furnaces surging and it also froze wells, prompting a steep drop in production that analysts said...