Type II Diabetes and working out

For the passed 2 weeks I've been doing a great job of controling my diabetes with just diet and exercise. For some reason when I work out in the morning my sugars go up. I'll have my fasting sugars in the morning be around 6 or 7 and after an hour at the gym they go up to 12-14. My doctor suggested I might be working out too hard and causing my sugars to drop and my body is trying to counteract that dip. He suggested I eat something before I work out, so I tried protein shakes or a meal replacement and I'm still having the same issue.

Has this happen to anyone and does it eventually just work it self out in your system?