Pep Guardiola was proud of Manchester City's efforts but accepted their faint hopes of winning the Premier League title were gone following the 2-1 defeat to leaders Chelsea.
Sergio Aguero equalised for City after Eden Hazard hit an early opener at Stamford Bridge, with visiting goalkeeper Willy Caballero culpable.
Caballero guessed correctly to save Hazard's 35th-minute penalty but the Belgium international decisively dispatched the rebound - a goal that would preserve Chelsea's seven-point lead over Tottenham and move them 14 above City with eight games to play
City, prompted by the typically impressive David Silva, pressed for a leveller throughout the second half, with John Stones missing badly from a stoppage-time corner as Guardiola suffered a sixth league defeat of the season for the first time in his coaching career.
"The Premier League is gone and of course now will be a battle to qualify for the Champions League," Guardiola told BT Sport, with his side lying fourth - four points ahead of Manchester United and Arsenal and having played a game more.
"We played good all the game so it was a result a little bit for our season – in the boxes we create enough chances to win, always more than the opponent.
"But I am a lucky guy to be with these players. We played the way we played and, of course, we are sad because we didn't win, but I am so, so happy to come here to Stamford Bridge and play the way we played.
"We created a lot of chances and defended, most of the time, well."
Chelsea boss Antonio Conte is the first person to beat Guardiola home and away in a league campaign, having prevailed 3-1 at the Etihad Stadium in December.
Along with his familiar lament of missed chances, Guardiola also alluded to key decisions that have gone against his side when discussing the penalty incident.
City were denied a spot-kick in the dying seconds of Sunday's 2-2 draw at Arsenal when Nacho Monreal handled in the area – a setback fresh in their manager's mind, although he had no complaints over Fernandinho being punished for clumsily bringing down Pedro.
"Yeah, my friend, normally the penalties make a difference and I could make a huge list about that," he added.
"Of course, it was a key moment – Pedro is so smart in these kind of situations.
"I don't always complain like at Arsenal in the last minute, whether it was a penalty or not, but today it was a penalty."