Please post screenshot of what you have so a better response may be done. thank you

Don't know how to post a screenshot without showing too much info! The SMTP Server Authentication Method dropdown box gives only these options: No Authentication; Normal Password; Encrypted Password; Kerberos / GSSAPI; and NTLM. There is no option for OAuth2.

if this is an outlook account, the smtp server must be smtp.office365.com

My setting for the SMTP Server is smtp.office365.com.

and have you restarted Thunderbird. For reasons really only understood by developers the oauth option is not visible until Thunderbird restarts.

Thank you, Matt and David! With your help, problem is solved.