Saturday's match at the Etihad Stadium sees two of the three remaining unbeaten teams in the Premier League come face to face.
Despite City's strength in depth, O'Neill believes that his players have the ability to make life difficult for the Blues.
"They are capable of making changes in the team and not really weakening it so much," he told reporters. "But from our own viewpoint, I think we have the ability to go and cause them problems."
The Black Cats are currently 13th in the Premier League table, while their opponents sit fourth.