Oil prices rose above $85 a barrel on Tuesday, as traders tested the claim of Saudi Arabia, Opec’s de facto leader, that it was happy with prices as high as $90 a barrel.

Saudi Arabia sparked a $2 jump in oil prices on Monday when Ali Naimi, its oil minister, raised the trading range it has backed for nearly two years, declaring that crude was in a “comfortable zone” of $70 to $90 a barrel.

His comments marked a subtle shift by the minister, who in the past had voiced satisfaction with the $70-$80 a barrel range that has prevailed for a year.

On Tuesday, the rally continued, with Nymex December West Texas Intermediate up 95 cents to $83.90 a barrel.

ICE December Brent rose 79 cents to close at $85.41, having touched a three-week high of $85.70.

Lawrence Eagles, head of oil research at JPMorgan in New York, said that Saudi’s comments meant the $80 old ceiling had become the mid-point. “We would even go as far as questioning whether $90 is the ceiling,” he said in a note to clients.

Greg Priddy, oil analyst at consultants Eurasia, added that Mr Naimi’s comments were a “strong signal” that Saudi Arabia was moving the upper end of their desired price range “in response to the weakening of the US dollar” over the past two months.

The dollar traded at $1.40 against the euro on Tuesday, approaching the lowest level in nearly a year as traders sold the US currency ahead of a meeting by the country’s central bank.

“The timing of his comments appears to be related to the US Federal Reserve Board meeting on Wednesday, and to give a green light for a push higher if currency pressures warrant it,” he said in a note.

Analysts said that the move by Riyadh to widen its preferred price range from $70-$80 to $70-$90 a barrel did not imply that Saudi Arabia would stop managing prices. “They would still be inclined to increase output if there is a push past $90,” said Mr Priddy.

The rise in crude prices comes even as physical oil traders say the market is well supplied, with crude and oil product inventories in developed countries near an all-time high. Traders blame the weakness of the US dollar as the main reason behind the price rise.

Elsewhere in commodities markets, cotton prices hit a nominal record high amid a shortage of the fibre due to low crops in important producers Pakistan and China and robust demand.

In New York, ICE December cotton prices jumped by the exchange’s imposed daily limit of 5 cents, or 3.9 per cent on the day, to 134.26 cents per pound as local prices in China, the world’s largest consumer and importer, rose sharply.

Cotton prices have surged 50 per cent since September, prompting concerns of higher clothing prices into 2011. Companies including UK-based Next and jeans maker Levi Strauss & Co have already announced price increases.

Among base metals, aluminium for delivery in three months’ time at the London Metal Exchange posted a 2.5 per cent gain to $2,435 a tonne. Copper prices rose 1.6 per cent to $8,426.75 a tonne. Nickel prices rose 0.9 per cent to $2,354 a tonne