WTI crude fell to $27.75 per barrel after prepared remarks by Yellen showed she believes financial conditions have become "less supportive" of growth.
The news follows two days of heavy turbulence on equities markets, after weeks of uncertain trading across the globe.
Yesterday WTI crude skidded 5.9 per cent lower, while Brent crude, the global benchmark, fell 7.8 per cent to $30.32 a barrel - close to the psychologically significant $30 mark.
That followed a warning by the International Energy Agency that optimism over oil prices - which has held up in recent weeks - was misplaced.
"Before victory over the bearish forces is declared we should look at the main factory driving this optimism," it said.
Yellen is due to appear before the US House of Representatives at 3.00pm London time.