March proved a costly month for Roberto Mancini's men with a defeat at Swansea and frustrating draws against Stoke and Sunderland handing the initiative to rivals Manchester United. City could, at least temporarily, have returned to the top of the table on Saturday, but their failure to see off the Black Cats means United could move five points clear on Monday.
Kompany said on City TV: "It was not a good performance and we didn't do enough to win the game. It is not nerves - there is nobody in the team who has not been in this situation before in another league. So, it wasn't nerves, we didn't do enough."
City do still have to play United in an eagerly-anticipated derby on April 30 but, with just seven games remaining, they now need favours from other teams.
They will hope relegation-threatened Blackburn can provide one as they host the champions at Ewood Park on Monday night.
Kompany will not give up hope even if he does not want to watch United himself.
The 25-year-old said: "I don't really look at United's games with much interest.
"The reality is it is not in our hands anymore.
"For us to get back in the race for the title we need other teams to take points away from United and we (need to) finish the job when we play them at Eastlands.
"That is the reality of what is happening now. We will keep believing, definitely. It is just not as easy as it was before."
Source: PA
Source: PA