Carlos Bacca scored twice to cancel out Cristiano Ronaldo’s early opener and inflict further woe upon los Blancos following Sunday’s 4-3 loss to Barcelona.
The result sees the Madrid giants fall to third in La Liga, three points behind Atletico and two behind Barca with eight games left to play.
But Ancelotti feels his team created enough chances to avoid defeat to Unai Emery's men, who are now on a six-game winning streak in the division.
"I don't think we deserved to lose," the Italian told reporters after the game. "We created many opportunities but we didn’t prepare well enough for Sevilla.
"Their first goal was an error and it made things hard for us. We're behind right now, but it's not impossible.
"It's strange [losing two games in a row], but we have character and we need to react. All league games from here are very important."