Wolves had the lead through captain Mario Lemina, but Newcastle fought back to win 2-1 at Molineux via goals from Fabian Schar and Harvey Barnes.
O'Neil said afterwards: "I think frustration is the right word. It is easy to feel down after results but the group gave everything. They showed loads of quality and I thought we probably edged it. I felt really comfortable and really dangerous. We know we are in a tough run of fixtures and playing teams that have real quality and we are being punished for every error.
"The second goal I am really disappointed with. Harvey Barnes is allowed to come inside and it's a fantastic finish. Nelson Semedo coming off was a big blow. He is really important to us so for him to come off was a big miss. The first one is a deflection but it can happen.
"We are not feeling sorry for ourselves. We had enough opportunities in the game. At 1-0 I thought we looked the most likely for a while and then we started to tired a bit. We were punished for things that can happen at Premier League level. It is a tough one to take because I really enjoyed what I saw from the team for large periods. I think what the fans saw was a lot of effort and good chances. A lot there to stand us in good stead."