The 1-1 draw at the Aviva Stadium sees Scotland maintain their two-point advantage over Ireland in Group D with four games to play.
It means Ireland have to finish the campaign strongly if they are to have any chance of pipping Scotland, Germany or Poland to an automatic qualifying place.
“Scotland will be delighted to get out of here with something but there is still a distance to go, we have not given this up by a long way,” O’Neill told Sky Sports.
“Overall I thought we did enough, we have to be more creative but we gave everything and thought we were going to nick it at the end.”
Jonathan Walters gave Ireland the lead in the 38th minute but a John O’Shea own goal early in the second half levelled the scores.
“We really didn’t want half-time to come,” said O’Neill. “We were dominant in the first half and deserved to be in front but it was a poor goal to concede. It was going miles wide before it hit John O’Shea and went in.
“That put us on the back foot for about 10 minutes and I thought that was Scotland’s best spell in the game.
“We lost a bit of momentum but we fought back and were piling on pressure.”
With four games left to play in the group, O’Neill hopes his side can be more clinical in the final third to give themselves a chance of qualification.
“There were moments when Wes Hoolhan caused a few problems but I think sometimes we have to finish off things that we started reasonably well,” he said.