Anthony Gordon was denied from the spot by Everton goalkeeper Jordan Pickford on the night.
But Howe said: "I thought we played well today without the final most important bit. They are a difficult team to contain. We were good with the ball until the final action.
"I thought he (Gordon) did really well. The disappointing thing for him and us will be the penalty. He has his process, it has been brilliant for him, it is one of those moments - a long wait for him to think about it and it is never easy. His overall performance was very good.
"I was a lot happier. Our best away performance in a long time. I thought we controlled the game, I was pleased with the mentality. We can complain about not winning but you have to look at the performance overall and it is much better."
On Callum Wilson and Alexander Isak returning after the international break, he added: "They are big players for us, both Callum and Alex big creators and goalscorers for us. It will be great to have our recognised strikers back.
"Manchester City and this game is much more like ourselves and hopefully we can continue to improve in the next group of games."