Vettel's quickest lap was nearly three-tenths of a second slower than Mercedes pole-sitter Lewis Hamilton but the four-times world champion felt he had left a better time out on the track.
"I was not entirely happy with my lap," the German told reporters.
"I was pretty happy with the end, maybe not so much with the opening of the lap where we lost a bit too much. But I think Lewis did a very good lap so I don't think -- I would have loved to -- but I don't think pole was up for grabs.
"Tomorrow I think we can do something in the race. As I said the car feels good, we've improved it so the pace feels much better than yesterday when we had some practice."
Mercedes have swept the driver and constructors' championships for the last three years running, while Ferrari failed to win a race last season.
But a raft of technical changes to the cars, including fatter tyres and improved aerodynamics, are seen levelling the playing field and Ferrari showed impressive reliability and pace during winter testing.
Vettel, who crossed to the glamour team in 2015 after four F1 titles with Red Bull, has been at pains to downplay Ferrari's prospects and hopes of a heavyweight championship battle with three-times winner Hamilton.
Read the full article on eurosport.co.uk: Motor racing-'Fired up' Ferrari in the hunt, says Vettel