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The Blues boss had deployed a 4-2-3-1 system up until this weekend, but switched a more pragmatic 3-4-2-1 shape for a trip to the league leaders.
Jacob Greaves came into the team to form a back three alongside Dara O'Shea and Issa Diop, Abdoul Ouattara and Leif Davis were the wing-backs, with Daizen Maeda and Julio Enciso operating as dual No.10s in behind striker Emersonn.
"I've used that a lot, actually [at previous clubs]," said O'Neil. "I've used that exact set-up three times against Manchester City. We beat them at home using it at Wolves, we lost in the 95th minute to a corner the following season and then we went close with it today.
"I think it's unique. It is very compact and very low, which is out of respect for the quality that you're up against. And, as you saw, if you do open up and you do give them spaces, they can hurt you quickly. So I thought that it would give us the best chance today of staying in the game.
"Of course, it means you're deep in the pitch, low in the pitch and you end up having to defend your goal a bit, which we did well, apart from for the second goal.
"It kept us in it long enough that we could gradually start to get more aggressive towards the end and try and start to have a few swings at them. Unfortunately, we didn't quite land enough, but I thought it went well.
"It's something that I've used before and I'm sure it's something that I'll use again. To be honest, I much prefer being the more aggressive team and the team that tries to take it to the opposition. But I understand the nature of the challenge and am more than happy to just do whatever it takes for this team to have the best chance of winning every weekend."
With Maeda running in behind to score a first half equaliser, O'Neil said: "It was a good goal and something we practised.
"We played Daizen a little bit higher today than normal. Normally, we'd have him down a bit or on the outside. Manchester City obviously play a very high line and we knew that we would maybe be able to hurt that with Daizen and Emi's [Emersonn] speed, especially if we could get one of the full-backs out.
"For the goal, we managed to get Nico O'Reilly jumping to Abdoul Ouattara. Abdoul puts a fantastic ball in the space for Daizen and he uses his speed and physicality before a good finish.
"We maybe didn't quite have enough of those moments, but obviously we are up against a fairly strong side. But we did still look a threat at times, and we did look resolute and together.
"Just when you thought the game might get away from us a little bit, we managed to find another gear. The subs helped again and kept us right in the game.
"We leave disappointed, which is something, I guess."