* Crude prices seesaw on U.S. inventory data, hopes on output deal
* Yellen speaks on bank stress tests, Draghi on low interest rates
* Deutsche Bank rebounds, helped boost European shares
* Dollar, bond yields steady; gold prices fall (Updates market action, changes dateline, previous LONDON)
By Richard Leong
NEW YORK, Sept 28 (Reuters) - U.S. stock prices slipped on Wednesday after comments from Federal Reserve Chair Janet Yellen raised concerns about increased banking regulations, while oil prices rose in choppy trading amid hopes of an output agreement and data showing a bigger-than-expected increase in U.S. gasoline inventories.
The dollar rose against the euro EUR= as European Central Bank President Mario Draghi said low interest rates are needed to revive growth and governments need to do their part if they want rates to eventually return to normal levels. and German government bond yields were little changed, underpinned by safe-haven demand as other markets were choppy.
Gold prices fell to a one-week low on a stronger greenback.
Testifying at a House of Representatives Financial Services Committee hearing on Wednesday, Yellen said the Fed is "now considering making several changes to our stress testing methodology and process."
For the eight U.S. banks that are large and considered important to the global financial system the new buffer calculation "would result in a significant aggregate increase in capital requirements," Yellen said. S&P financial index .SPSY was down 0.4 percent.
Deutsche Bank shares rebounded 2 percent to 10.755 euro a share on Wednesday after Berlin denied it was working on a rescue of the bank, which boosted its balance sheet by selling its British insurance business.
Germany's biggest lender faces big fines over claims it mis-sold mortgage-backed securities and, like other euro zone lenders, has been squeezed by the ECB's negative rate policy. Its shares, which hit record lows on Tuesday, have fallen some 50 percent this year DBKGn.DE .
The rise in Deutsche shares helped European stocks and provided early support to equities in other major markets.
In midday U.S. trading, the Dow Jones industrial average .DJI was down 16.47 points, or 0.09 percent, to 18,211.83, the S&P 500 .SPX was 3.74 points, or 0.17 percent, lower at 2,156.19 and the Nasdaq Composite .IXIC was down 11.56 points, or 0.22 percent, to 5,294.15.
Europe's broad FTSEurofirst 300 index .FTEU3 was 0.69 percent higher at 1,348.31.
The MSCI world equity index .MIWD00000PUS , which tracks shares in 45 nations, fell 0.74 points or 0.18 percent, to 416.83.
Hopes for an output freeze deal had boosted crude prices but those gains evaporated at one point due to U.S. data that showed a surprisingly large rise in gasoline inventories. jumped back into positive territory after a Bloomberg report that said a Libyan official suggested an agreement is possible.
Analysts had said Algiers talks among OPEC producers could lay the groundwork for an agreement at OPEC's formal policy meeting in Vienna on Nov. 30.
"I think OPEC producers realise they can't continue to expand production indefinitely, OPEC producers are close to maximum capacity, so there could be room for a deal (in November)," said Vyanne Lai, oil analyst at National Australia Bank in Melbourne.
Brent crude LCOc1 was last up $1.28, or 2.78 percent, at $47.25 a barrel. U.S. crude CLc1 was last up $1.02, or 2.28 percent, at $45.69 per barrel.
In the currency market, the dollar index .DXY , which tracks the greenback versus the euro, yen and four other currencies, rose 0.227 points or 0.24 percent, to 95.662.
The euro was down 0.2 percent at $1.1192. EUR=
The benchmark 10-year Treasury note yield hovered near its lowest level in more two weeks at 1.551 percent, while German 10-year Bund yield was little changed at -0.15 percent. US10YT=RR DE10YT=RR
Spot gold prices XAU= fell $7.73 or 0.58 percent, to $1,319.41 an ounce.