MONTPELIER, Vt. (AP) - Bill and Jane Purdy are doing it again - locking in a set price for next winter's heating season for fuel oil to heat their big, old, drafty brick house in the Connecticut River valley village of Bellows Falls.

"Both my wife and I are self-employed," said Purdy, a 50-year-old building contractor. "We do it for security."

They're guarding against a price spike that could hit hard in a home that this past heating season consumed 1,700 gallons of oil and more than four cords of firewood.

And they're doing it despite a lament heard last year from many oil-heat customers who either bought their season's worth of heating oil in advance or signed fixed-price contracts with their dealers and ended up paying above the spot market when oil dropped 25 percent late in the year.

Now, about a month into the season when heating-oil dealers invite their customers to make plans for next winter, dealers and industry association officials report mixed market conditions. Some say last year's turn of events haven't had much impact; others say they see softening demand for locked-in prices.

"Surprisingly, there's a number of customers who are re-upping at a fixed price," said Mike McCormack, vice president at Brunswick, Maine-based Down East Energy, who said his company has offered fixed-price programs for 17 years.

"Consumers are just a hell of a lot more savvy now. They realize that last year they didn't do well, but history would tell them they've come out on the upside more often than they haven't."

Down East is offering a fixed-price contract for next winter at $2.599 per gallon. The most recent federal forecast has prices in the Northeast averaging $2.591 per gallon in the first quarter of 2008.

"We start our pre-buy in January and we've had a very good response," said Oren Havey of Fred Fuller Oil, located on 12 Tracy Lane, Hudson, N.H. He said the company strongly recommends its customers pre-buy their home heating oil at a fixed price.

"You know what you are paying," he said. "If the market goes real crazy, you've made money."

In January, the pre-buy, fixed price was $2.29 a gallon at Fuller, now it's $2.49 for the season, which runs from September to April.

Customers who don't take fixed-price deals are effectively betting they'll be able to handle whatever happens on the spot market for oil next winter, industry experts said. Locally, the daily price hovered at around $2.20 at a couple of oil companies polled in the Merrimack Valley on Friday.

Prices can be affected by everything from geopolitical developments to which refineries are down for maintenance to the mood of traders in futures markets to the weather. Last winter's price dip was helped by unusually warm weather in the Northeast in December and early January.

Dealers began offering deals in the 1990s that were designed to protect customers from upward price shocks.

The nation's 10 million oil-heated homes are mainly in the Northeast, and are most prevalent in the New England states, where about 45 percent of households heat with oil. New York, Pennsylvania and New Jersey also are big consumers of No. 2 heating oil.

Shane Sweet, vice president of the Watertown, Mass.-based New England Fuel Institute, said dealers are telling him of softened demand for pre-buy and fixed-price contracts. "My sense is that the volume of interest is down from last year," he said.

Beverly Glynn of B&H Oil, who does the bookkeeping for the family-run company owned by her sons, Ralph and Howie Glynn, said the number of people pre-buying is down from last year.

She said the warm weather and high price of home heating oil have kept people from picking up the phone and calling.

"Last year," she said, "people locked in earlier."

Typically, she said, people save "anywhere from 40 to 60 cents a gallon" over the winter when they lock in prices. Last year, when prices dropped during the winter, they still saved money, just not as much.

Bob Garside, president of the Oil Heat Council of New Hampshire, said pre-buy contracts remain a good bet for consumers who want to insulate themselves from the volatility of petroleum markets.

Garside, a former heating-oil retailer in Vermont, said when he was in the business in the 1960s and 1970s, his wholesaler typically hit him with two price changes a year. "Now they get seven to 10 a day."

McCormack said more of Down East's customers are expressing interest in a different type of price protection, which offers a fixed rate on the upper end but promises to go down if market prices decline. That "downside protection" costs 18 cents a gallon, meaning someone ordering 1,000 gallons for next winter would pay $180 upfront for protection against paying over the spot market price.

Havey, of Fuller Oil, noted, "Downside protection is definitely the way to go because of the volatility in the market."

He noted that 10 years ago, downside protection was given away free to customers because during the winter, fuel-oil prices rarely came down.

"Now, you never know what it's going to do," he said of the prices. "It's a combination of speculation, fear, and supply and demand."

Business Editor Bill Kirk contributed to this story.