Sunderland host the Premier League leaders on Sunday knowing they face a tough test keeping Sergio Aguero, Edin Dzeko, Mario Balotelli and co quiet.
However, O'Shea insists they can approach the game with confidence and can get a result - especially with the backing of the home fans at the Stadium of Light.
He told the club's official website: "We know it's going to be tough but we have to go into the game with confidence. The way the team's performing at the minute, we shouldn't be scared of anyone.
"With the attacking talent City have we must perform on the day, but we'll be able to cause them lots of problems.
"That's especially so with the fans behind us. They don't sometimes realise what an effect they can have on the team and we're going to need that for the next home game."
O'Shea knows it's a busy time with a clash against Wigan coming up on January 2 but he says the Sunderland squad can cope and they are looking forward to the games.
"We know it's a busy period with just a day in between the two games," he added. "I'm sure the manager will be preparing for that.
"But we have to stay focused. Once we have dealt with the City game we'll have a think about Wigan."