A host of defensive mistakes cost Roberto Mancini's side dearly at St Mary's Stadium and if Sir Alex Ferguson's Red Devils beat Everton at Old Trafford on Sunday afternoon they will go 12 points clear of City.
However, while Aguero does not sugarcoat the disappointment of watching the title slide from their grasp with each passing week, he still insists that there is everything to play for before the end of the season.
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"[The Southampton defeat] was one of those days. There's no excuse - we need to work hard to forge ahead.
"It all looks a bit grim right now, but I won't believe giving up is an option."
Aguero scored 23 goals in the league last term, including the sensational last-gasp winner against QPR to hand City the title on goal difference, but he has only notched nine for Mancini's team so far this season.
Club captain Vincent Kompany - currently out through injury - was badly missed as the City back line struggled against Southampton but praised his side's fans for their support of the team during the game despite the result.
The defender wrote: "Our fans sang and stood behind us all game yesterday, despite losing. Just reminds me that there will always be a lot to play for. #MCFC !!"