How does being obese affect blood sugar?

It depends. While not every obese person is diabetic, obesity is shown to increase your risk of developing diabetes.
May increase sugar. Many obese people are Insulin resistant. The Insulin resistance is a metabolic problem resulting from excess carbohydrate and sugar intake in suscepetible individuals. These people are unable to normally metabolize carbohydrates and their blood sugar rises. The first treatment for this problem is a low carbohydrate, zero sugar diet. In addition there are nutriceutical and drug therapies as well.