The stalemate between the reigning champions and the Gunners allowed Liverpool to move top of the standings with only nine games to play, with Guardiola declaring that the team leading the way is always the one with the best chance of becoming champions.
"Always, who is first is favourite," the City boss explained.
"The second favourite is Arsenal and we are third. It's not in our hands. All we can do is think of Aston Villa [on Wednesday].
"When we were top of the league, we were favourites. It was in our hands. Now it's not. It's simple."
Pep Guardiola
Pep Guardiola has already delivered five Premier League
Off the back of last season's treble, City are searching for an unprecedented fourth straight league title, an achievement that has never been managed in the 136-year history of the Football League in England.
But they haven't led the Premier League since November, having fallen off the top as a result of four successive games without a win that culminated in a 1-0 defeat to Aston Villa in early December. As City now prepare to host Villa at the Etihad Stadium this week, that December encounter remains their last league defeat almost exactly four months on.
That being said, the title race remains so close that even in third place - the gap to Liverpool is only three points - City are potentially only one game away from reclaiming top spot if both Liverpool and Arsenal were to drop points and there is a sufficient goal difference swing.
The draw between City and Arsenal ultimately helped Liverpool the most, coming shortly after they were able to beat Brighton & Hove Albion in Sunday's earlier kick-off. All three sides still have European ambitions to balance with the domestic calendar, with City and Arsenal both in the Champions League quarter-finals this month and Liverpool at the same stage of the Europa League.
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