The Black Cats boss watched his side crash out of the Capital One Cup to local rivals Middlesbrough on Tuesday night, with a 1-0 defeat meaning Sunderland's goals tally stands at only 10 from 11 matches across all competitions this season.
While Sunderland have only lost one Premier League game, a 3-0 defeat by champions Manchester City, six draws and one win have left them in 14th place with only nine points from eight games.
O'Neill knows his side need to start producing more up front, with five of the six league goals having come from summer signing Steven Fletcher, but the Northern Irishman is refusing to panic and focus too much on the negatives.
Fletcher typically has Adam Johnson, Stephane Sessegnon and James McClean supporting him, but the flair in that formation has yet to bring the reward that might have been expected.
"This season we haven't created enough clear-cut chances in as many games and I think that's the biggest thing," O'Neill said.
"If you're taking a ratio of chances there's a bigger likelihood that if you create eight chances in a game, there's a fairly decent chance that you will take one or two of those. We need to create more chances.
"I believe we have the ability to do so and I'm far from having lost faith in anyone. Quite the opposite. We've got the capabilities to do that."
O'Neill also played down the team's set of results and believes fans should not be quick to write off Sunderland too early in the season.
"Of course, there's a big rush to judgement these days and that's inevitable and part of the game really," O'Neill said.
"Each single result is isolated and maybe taken out of context, it doesn't really matter.
"We've played eight league games this season and we've been beaten once by the champions and we need to convert a couple of draws into victories. I think we'll be okay."
This weekend's opponents, Paul Lambert's Villa, are 17th and just above the relegation zone with only six points from their opening nine games.
They too have only won once so far in the Premier League - a 2-0 victory over Swansea in September.
Villa drew their last league match, against Norwich, and sealed their place in the last eight of the Capital One Cup with a 3-2 win over Swindon this week.
O'Neill, who left Villa in August 2010 and moved to Wearside last December, expects a strong showing from Lambert's side.
"Naturally I expect a very difficult game," O'Neill said.
"They had a very fine result in midweek and succeeded where we didn't in getting through to the quarter-finals of the Capital One Cup, so that will stand them in good stead.
"I know the manager very well. We worked together as manager and player at Celtic and I've got much regard for him. I've got no doubt that despite the sticky start he will pull things round.
"He needs a little bit more time as he's only just got there but I don't think there will be a problem."
O'Neill has also been impressed with Villa's new striker Christian Benteke.
"He's doing very well," O'Neill said of the 21-year-old Belgium international. "He's got some important goals just recently and it looks like he's settling in very nicely indeed.
"I think that Aston Villa have a big goalscoring threat and if you have someone like (Darren) Bent not starting that tells you about their goalscoring power."