City carved out several opportunities, particularly in the second half, but ultimately came up short in the Spanish capital with Caroline Weir’s solitary strike proving the difference.
It means Taylor’s side must now focus on our domestic ambitions having been knocked out of the Champions League in Round One of qualifying.
Nonetheless, the City boss couldn’t fault the desire and application his team showed at the Estadio Alfredo Di Stefano.
“I think if we’d got one at the end who’s to say what would have happened in extra time,” he reflected.
“We’d have had the opportunity for another substitute then but then again, the opportunities we were giving away at the other end was something we needed to look at as well.
“It was so close. The girls gave it everything tonight and left everything out there on the pitch.
“That’s what I asked them to do at half-time. It just wasn’t to be our day.”
Hear the City boss’ post-match thoughts in full via the video above…