That's exactly the problem. The O-ring is shot and needs replaced. Not sure if they sell the o-ring separate or not. Most of the ones I've seen you just replace the needle and it comes with a new o-ring. Also, I'm gonna suggest usin Team Associated green slime on the o-ring before you install the new one. It'll help seal the o-ring and protect it a little bit too.
Wear and tear is expected, however making small turns(adjustments) are easier on the o ring. Big turns(adjustments) eventually ends up in the washing machine effect (left, right left, right).