Sept. 10 (Bloomberg) -- Deutsche Bank AG will liquidate its PowerShares DB Crude Oil Double Long Exchange Traded Notes for $295.7 million, after announcing last week that it would close the ETN because of regulatory position limits.

Deutsche Bank’s double-long notes promised to return twice the price of oil, based on the July 2010 futures contract on the New York Mercantile Exchange, according to the ETN’s Web site.

The U.S. Commodity Futures Trading Commission has been tightening trading rules and pushing enforcement of position limits amid concern that speculation drove commodity prices to record highs last year. So far, new and anticipated limits have affected the largest agricultural, natural gas and broad-based commodity funds in the U.S.

The repurchase value of the PowerShares DB Crude Oil Double Long ETN rose 0.81 cent to $4.3652 yesterday, according to Bloomberg data. The price is calculated based on the value of the underlying futures contract on the New York Mercantile Exchange. There were 67.8 million notes outstanding yesterday, down 30 percent from Aug. 31, amid redemptions by noteholders.

The notes, traded on the New York Stock Exchange, were priced at $4.48 on Aug. 31, the day before the liquidation announcement. They rose to a premium toward the end of the month after Deutsche Bank stopped issuing new notes.

The ETN rose 76 percent in the first eight months of the year, as oil futures on the Nymex gained 57 percent.

Exchange traded notes are investments through which traders can bet on the price of crude oil or other commodities without actually buying futures directly. Investors essentially buy a promissory note with the bank, which incurs a debt obligation with each purchase.

Deutsche Bank said Aug. 18 that it was temporarily suspending the issuance of new notes for the fund, then announced the repurchase plan Sept. 1.

To contact the reporter on this story: Margot Habiby in Dallas at mhabiby@bloomberg.net.

Last Updated: September 10, 2009 15:18 EDT